Private Equity Has a Problem. Uncle Sam Says Your Wallet Can Fix It.

The Securities and Exchange Commission has proposed new rules that would allow individual investors to buy private equity and other alternative funds. Chairman Paul Atkins framed the move as a matter of freedom and fairness, arguing that exposure to private markets should not be reserved for the wealthy. However, critics like Robert Plaze argue the real goal is giving private-fund sponsors access to retail capital.

The proposal would lift the SEC’s ban on performance-based fees, potentially enabling the classic "2 and 20" fee structure. Major sponsors like Apollo and Blackstone have already been racing to offer funds to individuals without such high fees. Critics warn that private assets carry high fees, valuation conflicts, and severe liquidity risks, making them unsuitable for many retail investors.

The Securities and Exchange Commission has proposed new rules that would allow individual investors to buy private equity and other alternative funds. Chairman Paul Atkins framed the move as a matter of freedom and fairness, arguing that exposure to private markets should not be reserved for the wealthy. However, critics like Robert Plaze argue the real goal is giving private-fund sponsors access to retail capital.

The proposal would lift the SEC’s ban on performance-based fees, potentially enabling the classic '2 and 20' fee structure. Major sponsors like Apollo and Blackstone have already been racing to offer funds to individuals without such high fees. Critics warn that private assets carry high fees, valuation conflicts, and severe liquidity risks, making them unsuitable for many retail investors.