Nicola Wealth Management has launched the NWM Private Equity Fund to allow its clients to gain access to private equity and mezzanine debt with a minimum investment of USD25,000.
The company and its principals have committed USD1-million of personal capital to the Fund, which completed its initial closing this past May and remains open to investment by NWM clients.
The NWM PE Fund is a "fund of funds" investing directly and indirectly in Canadian and global private equity and mezzanine debt, with an objective of achieving a long-term annual return that is targeted at 5% more than publicly traded equities. The Fund has already made investments in private equity funds managed by Northleaf Capital Partners, TorQuest Partners, Fulcrum Capital Partners and Headwater Equity Partners and has approved additional investments.
Private equity funds invest in less liquid securities (equity or mezzanine debt of private companies) and offer the potential for greater returns than those available from publicly traded securities. The NWM PE Fund has been designed to have sufficient diversification to allow an individual investor to have access to partial or full liquidity for their investment after a three-year minimum investment period, subject to certain limitations.
"Individual investors are normally precluded from investing in this desirable asset class due to the high minimums required by private equity managers and the preference of many managers to deal primarily with institutional investors," says Nicola Wealth Management’s founder and CEO, John Nicola (pictured). "Our strategy is to create an investment opportunity for clients where they can have a portfolio similar to ultra high net worth individuals and institutional investors but with a low minimum, the potential for some liquidity in an asset class that usually offers no liquidity, and the diversification of a fund of funds. I am confident that investors will be attracted to the unique attributes of the NWM PE Fund.
"To reduce fees and improve returns in this asset class, we plan to co-invest with our PE managers directly in certain opportunities that present themselves.”
To date, the Fund has attracted strong interest from existing investors and clients who are new to the firm. With the addition of the NWM Private Equity Fund, Nicola Wealth Management is now able to offer clients 14 funds and additional alternative investments ranging from real estate, private equity and subordinated debt to equities, mortgages, and fixed income securities.