Retail investors will be given access to private markets on Hargreaves Lansdown’s platform next week, but advisers have raised concerns about clients investing directly in these markets.
On September 15, retail investors will be gain access in the shape of two Long Term Asset Funds from Schroders Capital.
James Lowe, director, private markets at Schroders Capital, called it a “watershed moment” for the accessibility of private markets.
From April 2026, the government will also allow Ltafs to be held in Isas.
However, financial advisers are not so convinced and have raised concerns about the prospects for retail investors.
Scott Gallacher, director at Rowley-Tutton, said: “Private markets may have a role in niche areas like business relief schemes, but they’re not something I’d want most clients entering directly.
“From conversations in adviser circles, there’s a view that private equity valuations are currently under pressure and that some investors feel stuck in them.
“That raises a concern: are retail investors being invited in to share in new opportunities or, as some suggest, to provide a life raft for those already stranded?”
Rob Mansfield, adviser at Rootes Wealth Management, said closed-ended vehicles are a way to access unlisted investments.
He said: “Maybe we should support that sector rather than risk a repeat of funds seizing up when there’s a rush for the door.”
Philip Dragoumis, director of Thera Wealth Management, added: “As advisers and fiduciaries, we will not let our clients be an exit strategy for PE firms looking to offload their assets.
“These are illiquid and expensive products and all the research suggests that they have underperformed global equity indices when adjusted for leverage.”
While Katherine Steiner-Dicks, founder of BuzzVestor Media, claimed retail investors in private equity funds get the “nosebleed seats” compared to the bigger players.
She added: “Flooding funds with retail cash waters also down institutional transparency and clout (including private pension funds).
“That’s when PE funds could value assets too high to attract more retail investors, creating an inaccurate picture of performance. This is where mis-selling could occur and PE brands could ruin the industry’s reputation.
“What’s worse? If everyone in the cheap seats rushes for the exits, funds might dump assets early, killing long-term returns.”
The two Schroders Ltafs will be available on the Hargreaves Lansdown platform from September 15 with a minimum investment of £10,000.
The funds are the Global Private Equity and Energy Transition Infrastructure Ltafs.
The Ltafs can be bought at set times, usually monthly or quarterly, and investors need to give 90 days notice for withdrawals.
Emma Wall, head of platform investments, Hargreaves Lansdown: “For retail investors with a long-term investment horizon, the appropriate knowledge and resources, and as part of a well-diversified portfolio, private markets can play an important role in delivering unique growth opportunities beyond what is typically available in public markets.
“Ltafs offer retail investors a unique opportunity to access a wide range of alternative assets including private market investments through a fund structure specifically designed to invest in less-liquid assets.”
Wall said the online journey for investors would be simple to navigate and include the right restrictions and risk controls.
With thanks to the Newspage community for sharing their thoughts with FT Adviser.
tara.o’connor@ft.com
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