Fundrise, a real estate investment platform that has long leveraged Reg A+ to offer REIT investments, is expanding its pool of offerings according to an email. Fundrise will soon offer the “Fundrise Innovation Fund” aiming to provide access to “high growth, pre-IPO technology companies.” As of the end of December 2021, the Fundrise platform had approximately $2.41 billion in assets under management.
In a blog post, Fundrise explained they are aiming to democratize access to investments in top private technology firms:
“Although we are immensely proud of what we’ve built to date, we believe we’ve only begun to scratch the surface of the opportunities that we can unlock for investors. The proprietary systems and technology infrastructure we created to tap into private real estate are now capable of disrupting ownership of other asset classes previously inaccessible to individuals — in short, Fundrise has the potential to not only open up but completely transform the entire $10 trillion private market.”
Fundrise said the decision to expand outside of its core offerings of real estate investments is due to venture capital investments being “one of the best performing investments.” At the same time, the current market in venture capital is creating opportunities to launch a fund, according to Fundrise. “Be greedy when others are fearful,” states management. Fundrise also points to the fact that promising private companies strive to stay private for as long as possible – meaning smaller investors may miss out on capital gain opportunities.
The Innovation Fund aims to be a multi-stage, diversified portfolio of high-growth private technology companies as well as holding some public equities. Interestingly, unlike most VC offerings, Fundrise will not charge a carried interest fee as “they believe is not only excessive in cost but also leads to inherent misalignment.”
Fundrise will leverage its existing tech platform as well as its experience in Reg A+ securities offerings. The new Fund will be available to both accredited and non-accredited investors. Total annual operating expenses are said to be around 3%. The fund may raise up to $1 billion. The fund prospectus is available here.
The offering will first be made available to existing investors. Fundrise is hosting a waiting list for interested individuals.
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