The SEC Just Made It Easier for Ordinary Investors to Buy Private Funds. That Is the Pitch
Chairman Paul Atkins calls it freedom and fairness. The industry needs new clients because it cannot easily sell the old ones. Illiquidity does not get fairer because the form got shorter.
By Sean Anees Saifi · Capital Wealth · Published Thursday, October 1, 2026 · Source: The Wall Street Journal, Thursday, October 1, 2026 edition, whose market figures are the Wednesday, September 30 close (Markets)
Key Points
The Securities and Exchange Commission on Wednesday approved three measures to make it easier for private-fund managers to raise money from ordinary American investors, Chris Cumming reports — a market long mostly off limits.
U.S. securities laws have treated private equity, private credit, and venture capital as generally appropriate for institutions and wealthy people who can tolerate higher risk. Atkins said that policy was unfair to the investors it was designed to protect.
The agency proposed letting people invest if they pass a test of financial sophistication, or hold professional qualifications such as an accounting or financial-analyst license. It also plans to expand the types of funds that can charge performance fees.
Private-equity fundraising has declined every year since 2023, a trend PitchBook ties to underwhelming returns after the frothy post-pandemic years. U.S. private-equity managers raised about $160 billion this year through June 30, roughly in line with 2025’s muted total.
The industry’s main problem has been unloading companies at attractive prices, leaving a backlog of unsold assets, the Journal notes. Pension funds and endowments have been pulling back. Performance fees on a wider retail base are how the model refills.
3 measures
SEC actions Wednesday to widen who can buy private funds
$160B
U.S. PE fundraising through June 30, in line with a muted 2025
Every year
PE fundraising has declined since 2023 (PitchBook)
Illiquid
the feature that did not change when the form did
Private funds run on time — lockups, fees, and an exit that arrives when it arrives.
In one line: The SEC is opening private funds to more households just as buyout firms need new money and cannot easily exit old deals. Liquidity does not improve because the accredited-investor wall moved.
Wall Street’s top regulator took a step Wednesday that buyout firms have wanted for years: more ordinary investors in private funds. The SEC approved three measures to make it easier for private-equity, private-credit, and venture managers to raise from a vast market that used to be mostly gated, the Journal reports. Chairman Paul Atkins said the old policy was unfair to the people it claimed to protect. “At its core, this is a question of freedom and fairness.”
The agency proposed a sophistication test, or a professional license — accountant, financial analyst — as a ticket in. It also wants to widen which funds can charge performance fees, the extra slice of profits on top of management fees. That’s how private equity gets paid. It’s also how a household can pay a management fee plus a slice of profits for a vehicle it can’t sell on a Tuesday. Fundraising in U.S. private equity has declined every year since 2023. PitchBook blames underwhelming returns after the post-pandemic party. Managers raised about $160 billion through June 30, in line with a muted 2025. Pensions and endowments have been stepping back. The industry is stuck with companies it can’t exit at pretty prices.
When the old clients leave, the new brochure finds the kitchen table
A backlog of unsold assets isn’t a reason for a 401(k) to become the bid. Illiquidity, valuation lag, and performance fees were the point of the old accredited-investor wall. Moving the wall doesn’t make a 10-year fund a mutual fund. If a statement already has enough public equity, adding a lockup because a chairman said fairness is how people buy the inventory someone else can’t sell. Prediction: none. Observation: the product is being retailed because institutions got pickier.
Our read
Investments (IN04) / Consumer Protection (M11): watch, don’t chase. Private funds can belong in a plan for a household that already maxes tax-advantaged accounts, can stand a decade without the money, and can read a K-1 without blinking. They don’t belong as a fairness purchase. Size any alternatives sleeve so a job-loss year doesn’t require a sale that doesn’t exist.
If an advisor, app, or workplace window starts offering private access, ask lockup, fees, and what happens if you need the cash in 18 months. Fifteen minutes with those three answers. You don’t wait for the first capital call to notice you can’t get out.
What It Means For Your Portfolio
Watch — wider access is not better liquidity; don’t be the bid for unsold deals
The SEC is opening private funds to more households just as buyout fundraising stalls and unsold companies pile up. Access is not an exit.
General planning principles, not advice for anyone in particular. A sophistication test is not a liquidity facility. Private funds can fit a household that already funds tax-advantaged accounts, can leave the money untouched for years, and can stand capital calls. They are a poor match for a fairness slogan or for cash you might need in 18 months.
If private access shows up in a workplace window or an app, write down lockup, fees, and the exit. If those three lines are fuzzy, the backlog of unsold deals is using your statement as the bid.
