Fast-forward nearly two years, and Palico has signed up 600 limited partners, with 300 more in the firm’s application pipeline.
The online fundraising platform now counts more than 1,100 general partners from 60 countries. Roughly 90 percent of the world’s sovereign wealth funds are now on board and some of the biggest U.S. pension funds, including the California Public Employees’ Retirement System.
“If you’re in the middle of Alabama and you want to invest in Chile or Norway, want to buy secondaries, or you want to co-invest, it’s not that easy,” Drean told Buyouts. “If you’re a GP and you want to raise money because you care about LP diversification, it’s not that easy. Having a cheap tool that gets you in front of both of these group is quite nice.”
In a sign that it has been on the right track, Palico now faces competition from other online fundraising specialists such as Venovate Marketplace, AltAssets, and iCapital Network, which lists Credit Suisse and Eaton Partners as strategic partners.
One of Palico’s key distinguishing features: It’s regulated by the Financial Industry Regulatory Authority as a broker dealer in private placements. Palico follows FINRA’s “know your customer” rules by verifying accredited investor status, which allows GPs to post private placement memoranda and track record.
“It’s flattering that Palico has imitators, but even more importantly it’s nice to have first-mover advantage,” Drean said. “We are building on that edge through the growth of our services and our membership.”
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By Steve Gelsi