The range of financial institutions getting involved in so-called ‘Alternative Finance’ is expanding to a point at which we will soon have to drop the moniker ‘Alternative.’
An increasing number of pension funds are now participating in online funding marketplaces, in two ways.
In Crowd Valley’s most recent global funding marketplace report, presenting data from Q2 2014, we showed that around a fifth of new entrants coming into this market are financial institutions such as Private Equity firms, Venture Capital, Asset Managers or Investment Banks.
These actors are operating online marketplace platforms that look and feel in some aspects like equity-based crowdfunding sites but with far larger ticket value deals – often in the $50m-$100m range – and they benefit from the greater transparency and efficiency brought by systematizing and moving their compliance and investment processes online.
Accordingly, the first way in which pension funds are participating in Alternative Finance is that pension fund managers are starting to play a role as institutional investors in these platforms. Second, in some countries, pension funds are being used as a tool for company directors to generate additional working capital. Crowd Valley customers who identify themselves as Broker-Dealers, Private Equity firms or Venture Capital firms, for example, often work with pension funds either directly or indirectly through advisory groups.
Read the whole article on Crowd Valley’s blog: http://www.crowdvalley.com/news/two-ways-your-pension-fund-is-participating-in-alternative-finance