April 12, 2022
Wealthsimple, a Toronto-based financial technology company, has launched Wealthsimple Venture Fund I, a fund that will bring venture capital and growth equity to retail investors. In continuing to expand financial literacy and access, Wealthsimple’s newest offering will primarily target technology and healthcare companies. Clients will only need a minimum of $5,000 to begin investing.
Commenting on accessibility, Wealthsimple’s chief investment officer, Ben Reeves, said “Venture capital — and other private asset markets like private equity, credit, and real estate — have been a core part of successful investors’ portfolios for years, but high account minimums, net worth requirements, and arcane paperwork have made these opportunities out of reach for most investors.”
The company is partnering with Washington-based Accolade Partners, a platform that focusses on technology and healthcare venture capital and equity investments. Some of Silicon Valley’s largest firms, including Accel, Andreessen Horowitz and Kleiner Perkins (who were previously early investors in Instagram and Airbnb), are involved with the fund.
The model will be similar to other products on Wealthsimple Invest, their prior-established robo-advisor platform, in that costs for investors will cover security costs, as well as a management fee of between 0.4 and 0.5 per cent. Other underlying costs include fund administration fees, incentive fees, and fees paid to underlying fund managers.
Clients will meet with a registered portfolio manager prior to investing, to discuss risk tolerance and suitability of the investment. In line with most other venture capital funds, clients will also have to commit to leaving their investments in the fund for approximately 10 years. Existing clients will have first access to invest in the fund, while newcomers will have to join the waitlist, which Wealthsimple claims has already started.
By: Em Windrim