Expanding Access to Private Markets
ICI supports giving retail investors more opportunities to invest in private markets.
Institutions, college endowments, pension funds, and wealthy investors have long invested in private markets and benefited from stable, strong returns. Yet, the middle class has largely been boxed out from these wealth-generating opportunities.
Key Takeaways:
- Asset classes like private credit and private equity shouldn’t be walled off from retail investors saving for a more secure future.
- Regulated funds are the natural bridge for safely integrating retail investors into private markets. They are the ideal wrapper because they must follow strict legal requirements that include oversight from an independent board, limitations on leverage and transactions with affiliates, among other built-in protections.
- More fund managers should be allowed to invest in private markets, tailoring funds to investors’ financial goals.
- ICI advocates for regulatory reforms and policies that open private markets to a broader range of investors.
The number of publicly listed companies has declined dramatically over the past few decades. Fewer public companies mean less choice for individual investors. But private markets, which have experienced sustained growth for the past decade, are filling the gap left by the contracting public market and fostering capital formation in the US.
These markets are the next frontier, full of boundless opportunities for Americans who want to save for a home, their children’s education, and their retirement. Our goal, and our job, is to help them seize those opportunities, so they can achieve their American Dream.
Retail investors should be able to invest in the next generation of potentially transformative companies, because getting in earlier could lead to much bigger returns later. Investors deserve the freedom to take whatever approach works best for them.
We believe Americans should have the opportunity to safely invest in private asset classes through regulated funds—established financial vehicles with a robust regulatory framework and strong built-in investor protections. Regulated funds are the ideal wrapper because they must follow strict legal requirements that include oversight from an independent board, limitations on leverage and transactions with affiliates, among other protections.
The SEC’s recent actions on allowing closed-end funds (CEFs) to invest more than 15% of their net assets in private funds and principals-based co-investment relief were steps in the right direction, but there is more to be done.
Executive Order on Democratizing Access to Alternative Assets for 401(k) Investors
The most direct way to fulfill the President’s call for greater access to alternative asset investments is promoting exchange-listed products offering exposure through 401(k)s. Listed CEFs, in particular, can provide efficient, transparent access to private markets and are available through these brokerage windows. The SEC should approve the pending Cboe and NYSE exchange rule proposals that would end the annual meeting requirement for listed CEFs, which would help stop activist takeovers of the products.
The SEC can also encourage ’40 Act funds providing alternative asset access through more flexible co-investment and fund-of-fund relief. Since target date funds in 401(k) plans will likely access alternatives through ’40 Act funds, this regulatory flexibility is essential. These changes would help sponsors launch well-regulated alternative asset funds, expanding allocation options for 401(k) target-date funds.
Increasing Investor Opportunities Act
We strongly support the Increasing Investor Opportunities Act, which would codify recent SEC actions to allow SEC-regulated, retail CEFs to invest in private funds. The bipartisan legislation, which passed through committee in the House, would also help prevent predatory activist attacks against listed CEFs.
Key Resources:
Playing a Bigger Game: Why ICI Is Moving Into Private Markets
Eric J. Pan President and CEO Investment Company Institute ICI Leadership Summit Washington D.C May 1, 2025 Thank you, Carol, for your remarks, and thank you for chairing this summit. But most of all, thank you for your decades of principled leadership at MFS. You are a champion of retail investors and a credit to the entire industry. We’re sad to see you retire next year, but rest assured, your impact will be felt for decades to come. Thank you for leaving such a remarkable legacy! I’d like to build off Carol’s remarks. She said we need to “play a bigger game,” and at ICI, we couldn’t agree...
ICI to SEC: Principles-Based Co-Investment Framework Key for Expanding Retail Access to Private Markets
Washington, DC; March 4, 2025—The Investment Company Institute (ICI) wrote to the Securities and Exchange Commission (SEC) today to encourage the agency to approve a principles-based co-investment framework that would provide more flexibility for retail investment products. This would remove unnecessary barriers and allow everyday Americans to better access private markets. ICI President and CEO Eric Pan commented that “this relief would be an important move towards expanding retail access to private market investment opportunities while maintaining the underlying protections of the Investment...