Pacific Equity Partners to widen its Gateway fund to advised investors and not just the wealthy

Pacific Equity Partners’ Gateway fund has been returning up to 20 per cent to wealthy investors in recent years and soon access is expected to be made available to a broader clientele.

Pacific Equity Partners managing director Cameron Blanks.

Pacific Equity Partners is preparing to extend its Gateway fund beyond wealthy clients as investor interest in private markets grows and as the private equity fund rides high on returns edging 20 per cent for two years in a row.

PEP, with $14bn in assets under management, is understood to be gearing up to launch an open-ended feeder fund for its $500m Gateway fund, to be managed by Equity Trustees and offered to investors via financial advisers.

This will allow access to Gateway – the master fund – beyond the current wholesale investor segment.

The private equity firm is understood to be advanced in its push to extend access to the fund, and pitches to the advisory network are expected to begin as soon as next month.

Without confirming any timing for a launch, PEP managing director Cameron Blanks told The Australian the move to extend the Gateway fund beyond the current wealthy client list would be “approached with care”.

“At the end of the day, the long-term average returns out of private equity are far in excess of what the public markets have been able to deliver … I think it is very appropriate for retail investors to have some exposure to the private equity market,” Mr Blanks said.

“Like all things, there will be good products, and not so good products. We encourage retail investors to go and seek advice; and certainly our thinking when we’re starting to approach the more retail end of the market is to provide these products through financial advisers.

“That’s how we think about addressing that market, rather than direct-to-retail. That is the way we will come at it.”

PEP’s Gateway fund is an “evergreen”, or open-ended vehicle which allows monthly subscriptions and redemptions. Its current minimum investment is $50,000. A large portion of its investments are in continuation funds, whereby it buys into private companies already under PE ownership. A smaller portion – about 10 per cent – of the fund’s assets are invested in listed equities of global alternative asset managers such as Blackstone and Apollo. This listed exposure provides an element of liquidity for the fund.

The Gateway fund has raised about $500m from wealthy clients since being launched publicly in 2022, and has a long-term return target of 15 per cent per annum. It returned 20 per cent, net of fees, in 2024 and 19 per cent in 2023.

The fund is targeting assets under management in the multibillions of dollars by the end of the decade. It expanded to wholesale and institutional investors in New Zealand in mid 2024.

The widening of the Gateway fund to a new segment of investors comes as the corporate regulator circles private markets and threatens more regulation of the industry.

Opaque investment structures, questions surrounding disclosures and valuations, and the growing interest from retail investors are key concerns for the Australian Securities and Investments Commission, which last month released a landmark report into the rise of Australia’s private markets and corresponding decline of the public market.

Originally published as Pacific Equity Partners to widen its Gateway fund to advised investors and not just the wealthy