A beginner's guide to investing in the private markets

STORY CONTINUES BELOW THESE SALTWIRE VIDEOSPrivate-market investing used to be reserved for institutional investors and the ultra-wealthy who had at least $5 million in net assets, but markets and investment products have since evolved to allow people who have even just $100,000 in savings to enter this once-rarefied realm.

Understanding the risks, benefits and features, as well as fees and redemption schedules, of private markets is one of the first steps experts say neophytes should take before investing. To invest in private assets, the Canadian Securities Administrators, the overarching body that covers provincial and territorial regulators, said a person must meet minimum requirements of either: alone or with a spouse, owning financial assets that are worth $1 million or more before taxes, minus any liabilities ; alone or with a spouse, owning net assets valued at $5 million minimum ; or having a net income, before taxes, of $200,000 for the past two years, and if including a spouse, the...

But not all alternative investment products are that stringent on liquidity or structured that way. Some asset firms offer evergreen and open-ended funds that allow quarterly redemptions. Even then, it’s not like a public stock where there’s almost a guarantee that you can sell your shares on the open market and will find a buyer, Tyler Meyrick, head of private assets at Purpose, said.

If a venture-capital firm isn’t knocking on your door to invest in their latest fund as a limited partner, there are other avenues. Purpose launched three products in April: a private-equity fund, a private real estate fund and a private-credit fund. The minimum contributions range from $2,500 to $5,000 and redemptions can be made quarterly, but you still need to be an accredited investor.is growing, too, after securities regulators in 2019 altered the rules to permit retail investors access to strategies deployed by institutional investors.

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