Just a Little Bit Rich? This Company Wants to Talk to You
Mar 18th 2013 10:37AM
Updated Mar 18th 2013 10:40AM
Have you ever felt the urge to throw in your chips with the big boys, but aren't quite affluent enough to invest with the well-heeled set? Well, worry not. Now, you don't have to be a member of the 1% to invest in certain funds held by private equity firms like the Carlyle Group -- but you do have to be within the top 2% of wage earners.
Private equity opening up
The Wall Street Journal notes that, until recently, investors needed to fork over between $5 million and $20 million to become members of the Carlyle elite. But times have changed, and the P/E firm is looking to appeal to a wider audience, which it estimates to be worth around $10 trillion in the aggregate.
That's not chicken feed, and Carlyle isn't the only asset manager to see that lowering the bar a little might be a profitable move. Individuals are being seen in a new, more flattering light since the future of the old-fashioned pension plan is shaky at best.
Peers like KKR and the Blackstone Group have also added funds with lower barriers to entry. KKR now has a mutual fund that requires a mere $2,500 buy-in minimum, and Blackstone has recently begun allowing individuals to invest in specific hedge funds. Apollo Global Management also offers mutual funds for retail investors in addition to those being offered by KKR and Blackstone.
The Carlyle offering, however, is a buyout fund, and there are other parameters that must be met for admission: Net worth of at least $1 million, exclusive of one's primary residence, or more than $200,000 in income for the two years previous.
Making a comeback
PE firms seem to be making a comeback, and fourth-quarter earnings were outstanding for Apollo, which saw revenue jump almost 80% from the same time the previous year. KKR is no slouch either, and recently reported a huge net income hike due to big gains in investment activities and dividend income. Blackstone's performance fees went through the roof, and though Carlyle's earnings per share number was a tad disappointing, revenues increased by 14% year over year. The firm's founders did fine last year, too -- each of the three took approximately $135 million out of the company last year, despite eschewing a bonus.
Currently, Bank of America Merrill Lynch is the only firm selling the fund, but that may change in the future. So if you've always dreamed of becoming a takeover artist -- and you've got the deep pockets to buy in -- here's your chance. Just don't forget to bring your paystubs.
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The article Just a Little Bit Rich? This Company Wants to Talk to You originally appeared on Fool.com.Fool contributor Amanda Alix has no position in any stocks mentioned. The Motley Fool owns shares of Bank of America. Try any of our Foolish newsletter services free for 30 days. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.
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