The online brokerage Titan is giving retail investors access to private funds offered by alternative investment managers Apollo Global Management APO and Carlyle Group Inc CG.
In an interview with Yahoo Finance earlier this month, Titan co-founder and CO-CEO Joe Percoco said that Titan's new partners will allow its users access to private credit and real estate markets, areas that are typically reserved for institutional investors.
As well as Apollo and Carlyle, asset managers are trying to give retail investors access to private markets.
Titan's new real estate fund offering will include a 1.5% fee on top of Titan's 1% annual fee on deposits of $10,000 or more. Users with deposits less than $10,000 pay a flat $5 per month fee.
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A 1% fee with additional incentive fee added once a certain hurdle is met is added to the private credit offering from Carlyle.
As accredited investors, investors must qualify to invest in private equity companies that have not gone public yet via an IPO or other means.
In order to qualify as accredited, an investor must meet one of the following two conditions:
In the last two years, an individual income of $200,000 or more or joint income with a spouse of $300,000 or more is a reasonable means of maintaining that income level in the future.
Net worth of more than $1 million, excluding the value of a primary residence.
Titan is planning to expand its partnerships to additional investment managers and give investors access to new asset classes and funds along the way.
Benzinga's take: Access to private market offerings can help retail investors diversify their portfolios, but private equity markets are relatively illiquid and high-risk compared to public markets.
Retail investors should be cautious and make sure they understand any private investments they may buy.