Wealthsimple has introduced a private equity fund, its third private asset product as more fund managers continue to make such investments available to retail investors.
The robo-advisor and trading platform is launching Wealthsimple Private Equity with LGT Group, the private banking and asset management firm owned by the Liechtenstein royal family.
Like the private credit fund Wealthsimple launched in March with Sagard, the private equity fund is open-ended, with quarterly redemptions up to a limit of 5% of the fund’s assets. The management fee is 1.5%, with a 12.5% performance fee that kicks in at an 8% hurdle.
Chief investment officer Ben Reeves said private equity offers the potential for higher returns, albeit with the risk that comes with private companies and illiquidity.
He said Wealthsimple partnered with LGT because of its strong track record and co-investment in its funds.
“It’s a new fund being invested in the market at current market prices and not at mark-to-market prices that you might see in existing funds,” Reeves said in an interview.
“We’re investing in secondaries at discounts that reflect an actual market value, and then new investments in new companies. And I think particularly for private equity right now, when you’re looking to get invested, you want to be investing at the market prices as opposed to the fund marks.”
Since launching in March, Reeves said the private credit fund has more than $130 million in assets under management.
With credit, venture capital and now a private equity fund, Reeves said Wealthsimple has looked at introducing a private real estate fund but has so far stayed away due to valuation concerns in that asset class.
Asset managers including BMO Global Asset Management, Purpose Investments and CI Global Asset Management have all introduced private market funds this year for retail investors.
Only Wealthsimple clients with at least $100,000 in deposits with the firm will have access to the private equity fund, and there’s a $10,000 minimum investment. Interested investors must take a short suitability survey and then speak with a portfolio manager to determine the allocation.
Mackenzie introduces new ETFs
Mackenzie Investments launched four new ETFs on Monday: three fixed-income funds and an all-equity allocation ETF.
The Mackenzie Canadian Ultra Short Bond Index ETF (TSX: QASH) invests in short-term Canadian corporate and government bonds, with a 0.15% management fee. The Mackenzie Canadian Government Long Bond Index ETF (TSX: QLB) and the Mackenzie US Government Long Bond Index ETF (TSX: QTLT) provide exposure to longer-term government fixed-income securities. The funds have a 0.18% management fee.
Mackenzie also launched a new asset-allocation ETF.
The Mackenzie All-Equity Allocation ETF (TSX: MEQT) adds a 100% equity option to the firm’s asset allocation funds. The ETF invests in underlying Mackenzie index equity ETFs, with a target allocation of 30% Canadian equities, 45% to U.S., 18% to international developed market equities and 7% to emerging markets, with regular rebalancing. The management fee is 0.17%.