Primark Private Equity launched a new interval fund focused on the private equity space. According to the Fund’s prospectus, Primark Private Equity Fund will invest in private operating companies and private equity funds. These funds are are typically only available to institutional investors. The fund charges a 1.50% management fee. Primark is offering three share classes, none of which have a sales charge.
Entering the RIA Channel
Primark has quickly made inroads into the RIA market. TD Ameritrade recently added Primark to their custodial platform for independent RIAs. Primark also announced that their fund was available through Fidelity’s Institutional Wealth Services and National financial market places.
Expanding distribution through independent RIA’s and their custodial platforms is a major trend. This is a key way sponsors are providing broader retail access to alternative investment strategies such as private equity. As more interval funds make their way onto these platforms, more RIAs can provide access to alternative assets. Funds that used to only be available for institutions will become available for retail investors.
According to their press release:
The Primark Private Equity Investments Fund is designed for clients who want additional portfolio diversification and attractive risk-adjusted returns offered through a private equity asset class typically only available to large institutional investors. The private equity asset class has the potential to outperform the traditional public equity asset class over a long-term-investment horizon. This results from investor alignment of interest with management, greater input and control over strategic initiatives and investor driven operational improvements. Additionally, private equity investors coordinate the timing of the sale of their investments in portfolio companies to coincide with the most favorable market conditions. These factors provide the potential for attractive investment returns, increased portfolio diversification, low volatility and downside protection in periods of market stress.
According to the Fund’s management:
We believe that owning private equity is a crucial part of a well-diversified portfolio and that individual investors deserve access to this asset class in an investor friendly structure,” said Michael Bell, Managing Director of Primark. “We developed the Fund to give investors direct access to direct private equity investments. Equally important was registering the Fund under the Investment Company Act of 1940, adding transparency, increasing liquidity and lowering the costs typically associated with direct private equity investments.
Private Equity Outperformance
Private equity as an asset class has a long historical track record of outperforming public investments. Here is a chart from Primark’s fact sheet shows:
Additional details on Primark’s fund structure and strategy are available here.