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Private-markets access for retail investors is mostly good – but with caveats

Investors should be cautious about factors such as the policing of funds’ marketing, disclosures and practices, as well as the advisory process

 Genevieve Cua
Published Mon, Mar 31, 2025 · 06:00 AM
    • Private-market funds are expected to offer diversification benefits and higher risk-adjusted returns. Liquidity, however, is relatively infrequent and fees are higher.
    • Private-market funds are expected to offer diversification benefits and higher risk-adjusted returns. Liquidity, however, is relatively infrequent and fees are higher. ILLUSTRATION: PIXABAY

    [SINGAPORE] Allowing retail investors to allocate to private-market funds is surely a good thing. Higher returns are sorely needed for retirement portfolios.

    But it warrants caution as well. The devil is in the details – in the policing of the funds’ marketing, disclosures and practices. And, there is the financial advisory process, which is crucial to a well-informed decision. Advisers would be giving recommendations on a complex asset with higher fees – which could be a potentially lucrative revenue stream. They must be held to a higher bar when advising on such assets.

    On Mar 27, the Monetary Authority of Singapore (MAS) published a paper seeking feedback on a regulatory framework to allow private-market fund investments for retail investors. Access is currently limited to accredited investors, defined as those with net personal assets of more than S$2 million, or an annual income of S$300,000.

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