The chairman of the SEC, Jay Clayton, wants to level the playing field for retirement savers by letting 401(k) plan participants and holders of individual retirement accounts invest in private funds, according to news reports.
[Matt’s commentary: This is incredible news and if the SEC Chairman has his way, it could open more opportunities for anyone raising capital. It would wipe out the need to use Reg A+ to advertise to non-accredited investors.]
Clayton said that private equity and other types of illiquid investments can deliver superior returns but aren’t available to individual investors the way they are to managers of traditional defined-benefit pension plans, according to InvestmentNews.
“That retirement money in the defined-contribution plan doesn’t have the same investment opportunities that a defined-benefit plan has, even though they’re both retirement dollars,” Clayton said in an interview with David Rubenstein, co-founder and co-executive chairman of private equity firm the Carlyle Group, according to the publication.
Rubenstein slammed the SEC’s current accredited investor rule for allowing high net worth individuals to be eligible for private investments regardless of their financial literacy while excluding otherwise capable investors if they don’t meet income and net worth thresholds, InvestmentNews writes.
“You just outlined some of the problems with our current rule,” Clayton told Rubenstein, according to the publication. “We want to make sure retail is not left behind.” Jay Clayton The SEC is mulling redefining its accredited investor rules while Congress is likely to see the re-introduction of bills this year to allow investors with certain expertise and credentials to qualify as accredited investors without meeting income and net worth thresholds, InvestmentNews writes.
[Matt’s commentary: The biggest fight will come from two groups – congressman/women on the Wall Street payroll and state securities commissioners which feel the need to protect the “common investor” from dangerous investments.]
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Matt Scott is CEO/Founder of 7xCapital which specializes in private capital markets with a focus on raising capital from Accredited Investors. They guide companies through the labyrinth of the private capital world by applying proprietary processes and systems to target this elusive but prized segment of investors. Matt and his clients have raised over $500M. Along with his 14-person team, they provide execution and back office support to entrepreneurs for managing customized strategic systems for raising private capital. The 7x team currently serves clients in the U.S., Canada, Dubai, Israel, Finland, and Central America.
Matt is a speaker, advisor, and investor. Conferences and industry groups often invite him to speak at their events to educate and inform their audience on the latest strategies for appealing to the Accredited Investor. Matt has the credentials to back up his processes. He is an active investor in the alternative asset class with 25 years of experience of starting, capitalizing, operating and selling companies in the private sector. Matt has solved many of the issues and challenges in targeting the Accredited Investor and continues to stay on top of trends to develop new and effective strategies for raising capital.