CPP, Ontario Teachers', and CDPQ allocate roughly 30% to 40% of their portfolios to private markets. Your TFSA and RRSP almost certainly hold none. It's the single biggest reason institutional returns have outpaced retail for two decades.
What private markets actually are
Private markets are companies, real estate, infrastructure, and credit deals that don't trade on the public markets (TSX or NYSE). Think Private Equity, Private Credit & Real Assets. Until recently, only pensions and the ultra-wealthy could touch them. The minimum check was half a million dollars. Funny how your advisor never brought it up. The return gap is real
Private equity has delivered roughly 13 percent annualized over 20 years, net of fees. Public equities, closer to 9.5 percent. Private credit yields land in the 8 to 12 percent range. Compounded over 25 years, the difference between a 9.5 percent portfolio and a 13 percent portfolio is roughly 2.3x more capital at the end. That's a different retirement.
Institutions earn 11-13% year over year. The average Canadian retail investor earns 6%. That's the entire issue.
Lower correlation. Smoother ride.
What makes private markets special is that valuations move on real fundamentals (cash flow, occupancy, debt covenants) not random headlines. When the TSX dropped 20% in three weeks during March 2020, private real estate barely flinched. Pensions know that private markets smooth the curve.
Imagine yielding 10% consistently, getting paid monthly, with negligible volatility
Most private credit & real estate funds distribute monthly. Infrastructure assets like toll roads, energy facilities, and data centres provide long term contracted cash for decades. The tradeoffs (Let's not pretend they don't exist)
Liquidity. You can't sell a private credit stake the way you sell BMO shares. Lockups range from quarterly redemptions to multi-year holds.
Risk. Private deals can lose money. Diversification helps. Manager selection matters more than in public markets.
Fees. Private funds cost more than an index ETF. The net returns above already account for that. Illiquidity is the price of the premium. It's also the reason most retail investors were kept out. Institutions were happy to keep the edge to themselves.
Why you've been locked out (until now!)
For 40+ years, the minimum check to access top private market funds was $500k+. Accredited investor status was mandatory. Ever question why banks & advisors pushed mutual funds so hard... because that's what paid them the most, not you.
In fact, most advisors don't even hold the licenses to sell alternatives.
Venturevest closes that gap.
We dropped the minimum from half a million to $5,000. Now, Canadians get direct access to the same managers the largest institutions use.
We've educated you...now it's up to you You can keep allocating like a 1975 retail investor. Index funds, GICs, and a portfolio your bank built for its own profitability, not yours. Or you can allocate like the institutions that have been compounding ahead of you for decades.