As an answer to the growing interest among self-directed IRA investors and a growing trend in equity-based crowdfunding platforms, PENSCO launched The PENSCO Marketplace on Wednesday.
The Marketplace is a platform displaying a network of providers, products and services for alternative asset investors — with the goal of making it easier for clients to locate and invest in private placement opportunities.
“Equity-based crowdfunding is an area that we are watching closely, as it continues to gain traction among self-directed IRA investors who are knowledgeable and passionate about investing in this space,” said Kelly Rodriques, CEO of PENSCO, in a press release. “As more of these platforms come to market, we want to provide exposure to these investments for our existing and prospective clients.”
While PENSCO’s focus is on self-directed, accredited investors, more and more clients are coming to the firm through RIAs, which now generate about 20% of new account openings, Rodriques recently told ThinkAdvisor.
Where PENSCO once saw a majority of client investments held in the real estate category, Christopher Orr writes in an Aug. 4 blog post that more and more investors are participating in private equity deals, largely thanks to the growing popularity of equity-based crowdfunding websites.
“Today, over 50% of the new investments we see are in private equity, and a growing number of those deals are discovered through crowdfunding platforms,” writes Orr, a relationship manager for PENSCO. “Our customers love that these sites allow them to look beyond their current deal to the next one — something that wasn’t so easy to do before equity-based crowdfunding came into the picture.”
As Orr points out in his blog, equity-based crowdfunding platforms are only two years old. They’ve been around since 2012 and have since raised roughly $400 million.
These platforms, which allow investors to receive equity in the business they choose to back, have made it much easier for accredited investors to discover new startup funding opportunities.
“With more and more of our clients turning to crowdfunding sites, we’re committed to helping them navigate the considerations and challenges that go along with this new investment landscape,” writes Orr. While PENSCO is working with a number of new crowdfunding sites that give accredited investors access to private placement opportunities in a variety of industries, initially the Marketplace will feature six crowdfunding sites — CircleUp, FundRise, HealthiosXchange, I-Bankers Direct, Rock The Post and Zanbato. PENSCO, performing the duties of an independent retirement custodian, has pre-reviewed many of the offerings found on the participating crowdfunding sites in an effort to expedite the ability to accept qualified retirement dollars.
Through The PENSCO Marketplace, clients will also have access to professional resources to facilitate alternative asset investments, such as a network of attorneys and accountants who specialize in real estate, private placements and various other alternative investments. PENSCO will also offer non-recourse loan resources on the platform for investors who want to purchase real estate with IRA funds but who don’t have sufficient funds for the investment.
PENSCO says it plans to keep expanding the marketplace with investment opportunities and professional resources.
“Our goal is to be the go-to resource for individual investors and their advisors who want to hold alternative assets in their retirement accounts,” said Rodriques in a press release. “Whether it is seeking a private placement opportunity in the expanding crowdfunding space, or using IRA funds to invest in a condominium or office complex, we will make it possible for investors to find the resources they need to help meet their long-term investment goals.”
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