There's a pretty big change coming for individual investors: the SEC is preparing a proposal that would open up much broader access to private markets, which historically have largely been reserved for institutions and wealthy investors.

This could expand individual investor access to private equity, venture capital, private real estate, and private credit. If regular investors are eventually able to get diversified exposure to institutional-quality private market investments at reasonable fees, that could open up entirely new asset classes for portfolio construction.

What really caught my attention is buyout private equity, where PE funds raise capital to acquire established companies, often using leverage, and then try to improve the businesses before eventually selling them. Kind of like a Berkshire approach, but generally with more leverage, a shorter holding period, and a much more hands-on "lean it out and improve it" mentality.

Historically, private equity has beaten public equity returns over long periods. The Cambridge U.S. Private Equity Index, which includes buyout PE and growth equity, returned 13.7%/yr over 20 years versus 11.0% for the S&P 500 equivalent.

What does everyone think? Is broader access to private markets a genuinely exciting opportunity? And if institutional-quality options became available at reasonable fees, would you actually carve out part of your portfolio for private market investments? If so, which ones and how much of an allocation?

Article:
finance.yahoo.com - SEC preps plan widen investor