Private Market Alternatives for eligible investors
As wealth grows, goals evolve. For customers who meet certain eligibility criteria, Fidelity offers alternative investments beyond the traditional.
Reasons to consider investing in private market alternatives
Expanded investment universe
Significantly expand your investible opportunity set by adding private markets to your portfolio versus investing in public markets alone.
Enhanced returns and income
May help improve total returns or income, potentially bolstering a portfolio's overall performance across market cycles.
Diversification
May produce returns that differ from traditional asset classes, potentially improving portfolio diversification and risk-adjusted returns.
Private market alternative asset classes at Fidelity
Private equity
Seeks to provide enhanced long-term capital appreciation by investing in the equity of private, non-traded companies.
Private credit
Seeks to provide higher income and/or total returns by investing in privately negotiated loans, bonds, or other below-investment-grade debt instruments.
Real assets
Seek to provide attractive total returns, diversification, and income through exposure to physical assets, such as real estate and infrastructure.
A quick conversation gets you started
Schedule a quick check-in to confirm your eligibility, answer your questions and gain access to private market alternatives at Fidelity.
Is investing in alternatives right for you?
Private market alternatives differ from traditional investments in multiple ways, including eligibility requirements, liquidity, and risk.
Generally, investors must verify their income, net worth, or investable assets to show that they meet one of the eligibility criteria.* Fidelity currently has opportunities for investors who meet the Qualified Purchaser eligibility criteria:
Qualified Purchaser
An individual who alone or with a spousal equivalent, owns at least $5,000,000 in investments.
There is another investor eligibility level for alternative investments referred to as Accredited Investor, which, among other criteria, specifies that an individual must have $1,000,000 or more in net worth or $200,000 or more in annual income.
Liquidity refers to how easily you can sell an investment. Alternative investments offer a range of liquidity, where your ability to sell or redeem an investment can be limited. Private alternatives are often accessed via illiquid or intermittently liquid vehicles, which may limit access to your investment, but can also offer the potential for higher returns. It is important for you to understand these key concepts as you consider each individual investment opportunity.
- Lock-up periods. Some investments may be subject to a lock-up period, during which time the investment cannot be sold, often for a period of many years.
- Illiquidity premium. In exchange for tying up capital for longer periods of time, illiquid alternatives typically offer the potential for higher returns, referred to as the "illiquidity premium."
- Intermittent liquidity. Some types of investments allow you to redeem shares during specific time periods or at the fund manager's discretion, sometimes referred to as "tender windows" or "repurchase offers."
If you're looking for investments with greater liquidity, consider publicly traded alternative investments, a.k.a. liquid alternatives, which are structured like mutual funds or ETFs.
Investing in private alternatives generally presents a high degree of risk, although investors taking on that risk may be compensated by the potential for improved total returns and bolstered portfolio performance across market cycles. Private alternatives as a category have some common risk factors and other considerations that investors should review before investing, including the following:
- Unique investments. Every alternative investment opportunity is different. Each alternative investment opportunity has a distinct set of risk and return objectives.
- Liquidity limitations. Some private alternative investments are typically less liquid than traditional investments, which means investors may have no access to the money they've invested, or any potential profits, often for a period of many years.
- Fees. Many alternatives have fee structures that differ from traditional investments, so it may take a deeper investigation to understand what you may be paying in fees. These fee structures may also result in higher costs.
- Taxes. Some investments require tax reporting related to alternatives, such as Schedule K-1s, which arrive later than other types of tax forms and can make filing income taxes more complex. Alternatives, such as mutual funds and ETFs, provide the convenience of a 1099 form.
- Monitoring. Monitoring financial performance of alternatives can be more complex than traditional investments. It may be difficult to determine the current market value of an alternative asset, and there may be limited historical risk and return data.
- High investment minimums. Many alternatives require a significant minimum investment as compared with traditional investments.
Why Fidelity for Private Market Alternatives
For more than 75 years, Fidelity has been a market leader in both active and passive asset management, helping millions of investors pursue their financial goals. In the alternative investments space, our team conducts deep research of public and private assets across a broad array of asset classes in an effort to uncover attractive opportunities for investors. We then provide customers with the convenience of a single platform where they can monitor and manage their entire portfolio, including stocks, bonds, CDs, crypto, and alternatives.