Called the Cornerstone Private Markets Managed Portfolio, Russell Investments and Blue explained that they launched the portfolio because many private companies are staying private longer and “some may never go public at all”.
“This means many investors risk missing out on the growth stories driving industries of the future. The Cornerstone Private Markets Managed Portfolio seeks to solve this gap by offering a simple, advised pathway into private equity, private credit and real assets,” the firms said.
With a minimum initial $25,000 investment, the new portfolio uses a separately managed account structure, developed in collaboration with Ironbark.
According to the financial institutions, this structure allows them to “give qualified advised clients of Invest Blue diversified access to institutional-quality private market opportunities within structures designed for retail investors”.
“For too long, access to private markets has been limited to large institutions and ultra-wealthy investors. But many of the world’s most innovative and successful companies are choosing to stay private,” said Chris Ogilvie, chief investment officer at Invest Blue.
“This managed portfolio allows our clients to participate in those opportunities – through a carefully designed structure for retail investors.”
As the market currently stands, alternative and private investment options on managed account platforms are limited.
“At the moment, the platforms are only really solving for liquid alternatives, which has got daily pricing. I think the industry’s probably got a little way to go in solving semi-liquid alts and how you could cater for longer lock-up alternatives,” Matt Walsh, general manager of distribution at Praemium, told an ifa webcast last month.
However, many clients are now approaching their advisers to look to break into the private market, with advisers often lacking the resources to do so.
“Private markets are increasingly being recognised by advisers as an important source of diversification and long-term return potential,” said Alex Donald, CEO, investment solutions at Ironbark.
“At Ironbark, we saw a real opportunity to democratise access to these assets through a retail-compatible managed account structure that features institutional-grade controls around governance, transparency and liquidity management.”
Explaining how the portfolio works, clients will have their assets invested in three to 15 holdings in private equity, private credit and real assets.
“Russell Investments has been investing in private markets for more than 50 years. Our global scale and manager research means we can help open the door for Australian advised clients to participate in institutional-grade opportunities – overcoming many of the traditional barriers faced by retail investors,” said Neil Rogan, head of distribution, Australia, at Russell Investments.
