Continually searching for additional capital commitments to their funds, PE sponsors have long had to juggle whether the benefits of fundraising from high net worth individuals (HNWIs) is worth the associated effort and drawbacks, most notably from being forced to go through private bank feeder funds. Sponsors are reconsidering that issue, however, as alternative fund structures and the opportunities afforded by nascent technology offer new pathways for PE sponsors and other fund managers to bring alternatives to the mass market. This second article in a two-part series examines some of the new avenues sponsors are using to obtain improved access to HNWI capital, including the use of business-to-consumer aggregation platforms and the tokenization of funds through blockchain-based products. The first article
specified obstacles sponsors face when fundraising from HNWIs; the landscape of existing business-to-business (B2B) approaches in the PE industry; difficulties associated with procuring that capital via B2B channels; and reasons actors are pivoting away from B2B approaches. For another context in which HNWI capital is valuable, see our two part series on seeding arrangements: “How a Manager Can Optimize Its Infrastructure to Attract a Seeder
” (Sep. 22, 2020); and “Finding the Right Seeder/Manager Rapport and Tips for Luring Other Prospective LPs
” (Sep. 29, 2020).