Why Private Equity Is Eyeing Your Nest Egg

Private equity has long been an exclusive club, a world of opaque funds and high fees where only the wealthiest and most sophisticated investors can gain a foothold. Its allure lies in its promise of blockbuster returns: daring financiers pile up mountains of debt to buy companies, then attempt to revive them—with scant oversight. Now those same firms want a piece of your nest egg.

Seeking to tap the trillions of dollars in brokerage accounts held by everyday investors, these companies are cozying up to traditional asset managers. Alternative investment shops, which specialize in asset classes outside public stocks and bonds, have been touring mutual fund houses to gauge their interest in tie-ups that would dramatically extend their reach. “There’s a lot of conversations,” says Russ Ivinjack, global chief investment officer at consulting firm Aon.