Play the private equity investment game with Blackstone, Apollo, and More - All You Need Is a Million (peanuts)

 "Private-equity firms ...  have created a host of new products aimed at people with $1 million to $5 million in investible assets and are hiring armies of staff to market them to private banks and independent financial advisers." - The Wall Street Journal, June 7, 2022.

According to Capgemini, 2020 figures indicated there is about $79.6 trillion in investible wealth associated with individuals. This is at a time when the traditional customers such as pension funds and large institutions bulked up enough on what private equity firms offer and/or have lost confidence. 

This pivot to what's being called the "mass affluent" market segment isn't new. Blackstone was there in 2017 with its lower-cost nontraditional real estate investment trust. 

What is new are these intersecting forces.

One is the need for private equity firms to diversify the sources of revenue. The advantage of individual investments, unlike the in-and-out buyouts, is that the transaction is evergreen. Some of the capital stays with the private equity fund. The other is the disenchantment of investors with the traditional vehicles to build wealth. Other options used to be open only to billionaires. Now those with only a million are being welcomed. That's peanuts. Probably a senior law associate could have that available for investing. 

Currently Apollo is pouncing on this opportunity. It has three products and intends to add more. It's staffing this niche with 145 professionals. A key acquisition last December has been Griffin Capital. For that Griffin Capital transaction Wall Street law firm Paul Weiss served as legal counsel.

Given the volatility throughout investing, there is no predicting if this mass-affluent focus will bring in the big bucks for large players such as Blackstone and Apollo. However they have the resources to try out new things. 

Connect with Editor-in-Chief Jane Genova at janegenova374@gmail.com. She helps businesses conjure up magic in their storytelling. One client said, "She makes shipping containers ‘sexy.’"

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