Private equity has long been part of the standard repertoire of institutional investors. However, for private investors, the barriers to entry into the asset class are usually too high. Nao now wants to offer investments in private equity funds from €1,000 on the German market.
According to its own statements, the fintech company is the first provider on the German market to enable investments in a private equity fund starting at such a small sum – until now, there had been options for this via tokenization.
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Co-investment approach facilitates access to UBS funds
This is made possible by a co-investment approach via the Nao platform: via this, private investors are to participate in a private equity secondaries fund managed by UBS. The Private Equity (LUX) Evergreen Secondary Fd EUR seeding-acc (ISIN LU2461279726) is accessible to semi-professional investors from a minimum investment amount of €50,000, Nao lowers the minimum investment amount to €1,000. Investors receive fractional shares of the fund booked directly into a custody account at Baader Bank. The net target return is 12 percent per annum. The semi-liquid fund can be sold on a quarterly basis.
“Private equity as an asset class has so far remained mostly closed to investors. Yet this asset class usually offers attractive double-digit returns and is well suited for portfolio diversification – regardless of the capital market,” says managing director and co-founder Robin Binder. In 2022, the 29-year-old founded the Berlin-based company. Previously, he spent several years advising larger medium-sized companies in the Stuttgart region for Hypovereinsbank and helped build a single-family office, among other things. Fintech Nao describes itself as a “digital family office.”
Access to private equity is becoming easier for private investors
In general, fintech companies and asset managers have made it easier to access private equity investments in recent years. Moonfare, for example, has long advertised making private equity available to retail investors through individual funds and funds of funds, even with lower minimum investments. The company RWB provides access to private equity funds starting at €5,000. The real asset and investment manager Wealthcap markets corresponding funds of funds specifically to private banking customers. Other fund-of-fund providers or private banks also entice customers with low entry barriers.
Funds under the Eltif regulation offer direct access or access via co-investments to private equity. The market for European Long Term Investment Funds has grown strongly in recent years. From 2024, under the new Eltif regulation, private investors will be able to participate in fund vehicles that invest away from the stock exchange without the minimum investment amount of €10,000 that has been applied to date.
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First published in private banking magazin. A third-party contributor translated and adapted the article from the original. In case of discrepancy, the original will prevail.
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