SEC Expands Accredited Investor Definition Boosting Retail Access to Private Equity

Private equity, once dominated by institutional investors and wealthy individuals due to its complexity and risk, is increasingly being opened to retail investors as regulatory definitions broaden. This shift comes as private market assets are projected to grow rapidly, outpacing public market growth and attracting new interest from individuals seeking diversification and higher returns. However, access for retail investors often comes through vehicles with significant restrictions, such as limited liquidity and potentially lower-quality investment opportunities compared to those available to institutional players. The rise of private equity's influence, marked by leveraged buyouts and serial acquisitions, has brought both significant profits for firms and concerns about the debt burdens placed on portfolio companies. As private markets expand and begin to resemble public markets in scale and reach, questions persist about whether retail investors are adequately prepared for the risks and complexities involved. The democratization of private equity thus presents both opportunities and challenges for individual investors.