Four Ways Into Private Equity, and What Each One Really Gives You

You can invest in private equity funds without being a millionaire through four main routes: buying shares in listed private equity firms, buying private equity ETFs, investing in interval or tender offer funds, or gaining exposure through a pension or retirement plan.

If you own an S&P 500 index fund, you probably already own a small piece of the industry. Blackstone, KKR and Apollo, three of the largest private equity firms in the world, are all now in the S&P 500.

This guide explains each route in detail: what you actually own, how easily you can get your money back, what it costs, and the questions to ask before you invest. FRC has no relationship with any private equity firm or fund and earns no commission from any investment, so everything here is explained for one purpose: helping you understand what you are buying.

Prefer to watch? FRC’s video on how to invest in private equity funds covers the four routes in under five minutes, and it sits within our fact-checked explainer playlist on YouTube.

Why Most Private Equity Funds Are Closed to Ordinary Investors

Traditional private equity funds are private offerings, and most are open only to accredited investors. Under the SEC’s definition, an individual generally qualifies with a net worth above $1 million, not counting their primary home, or income above $200,000 a year, or $300,000 together with a spouse or partner, in each of the last two years.

Many of the largest funds go further. To avoid registering under the Investment Company Act of 1940, a fund relying on the Section 3(c)(7) exemption can accept only qualified purchasers, which for an individual means owning at least $5 million in investments. Minimum commitments are often far higher than most people could invest in a single fund.

These rules exist because traditional funds lock money up for about ten years, use significant leverage and publish far less information than public companies. If you want the full picture of how the industry works, from leveraged buyouts to fees and exits, start with FRC’s guide to how private equity actually works.

The Route Most People Never Hear About

There is one way into accredited status that has nothing to do with wealth. Since the SEC updated the accredited investor definition in 2020, individuals who hold the Series 7, Series 65 or Series 82 licenses in good standing also qualify.

The SEC’s reasoning was simple: knowledge, not just money, can show that an investor understands the risks. For anyone building a career in finance, that turns a professional qualification into a door that most investors assume is closed to them.

FRC’s Series 65 Exam Preparation covers the Uniform Investment Adviser Law Exam, which has no sponsorship requirement and can be taken on your own. The Series 7 Exam Preparation course prepares you for the General Securities Representative exam, which requires sponsorship by a FINRA member firm, and the SIE Examination Preparation course covers the exam you can pass before you are hired.

Every FRC course can be spread across interest-free monthly payments, so cost is no reason to put the qualification off. The candidates and investors who start now are the ones who reach accredited status first.

A License That Employers Can See

Passing the exam is the first half. The second is making sure the people who matter can see it. FRC’s Professional Membership includes a verified Digital Profile reached through a QR code on your resume, showing your credentials, your exam progress and a short Video Resume in your own voice.

That solves two problems at once. You show an employer who you are and what you have achieved, rather than listing claims on a page. The employer gets a faster, clearer picture of every candidate, with less time spent checking qualifications. If private equity interests you as a career as well as an investment, FRC’s video on how to get into private equity explains the routes in.

Way One: Buy the Private Equity Firms Themselves

The simplest route is to buy shares in listed private equity firms. Blackstone, KKR, Apollo, Carlyle and Ares all trade on US stock exchanges, so anyone with a brokerage account can buy them in the same way they would buy any other stock.

The key is understanding what you own. You are not buying the companies inside their funds; you are buying the manager, a business that earns management fees and a share of the profits, known as carried interest, from the funds it runs.

That is a different investment from owning a buyout fund. The manager earns fees on assets it oversees across private equity, private credit, real estate and infrastructure, so its fortunes depend on how much capital it can raise and how well its funds perform overall.

Because these are listed shares, their prices move with the stock market every day. In a sharp sell-off, listed private equity managers can fall heavily, often more than the broad market, because investors worry about slower fundraising and fewer exits.

Way One, Continued: You May Already Own Them

Blackstone joined the S&P 500 in 2023, KKR in 2024 and Apollo later in 2024. That means anyone who owns an S&P 500 index fund or ETF already holds a small slice of all three.

The slice is small, because each is just one company among roughly 500, weighted by market value. But it is a useful reminder that private equity is woven into the public markets more than most people realize.

If you are new to index investing, FRC’s complete step-by-step guide to investing in ETFs explains how S&P 500 funds work and how to choose one.

Way Two: Private Equity ETFs

Private equity ETFs offer a basket of companies connected to private equity, bought and sold like any other ETF. You can buy a single share, there is no accredited investor requirement, and there is no lock-up.

But check what they hold. Many of these funds own listed private equity managers alongside business development companies, or BDCs, which mainly lend money to mid-sized private companies, and listed investment companies that own stakes in private businesses.

That means a large part of what you own may be private credit rather than private equity. In one US-listed private equity ETF, the top holdings are BDCs such as Ares Capital, Main Street Capital and FS KKR.

Fees deserve close attention too. One of the largest private equity ETFs reports an expense ratio of around 1.8%, compared with a few hundredths of a percent for a typical S&P 500 index fund, largely because it must include the costs of the BDCs and investment companies it holds, known as acquired fund fees. Always check the current figure, holdings and distribution history on the fund’s own website.

Way Three: Interval Funds and Tender Offer Funds

The fastest-growing route for individual investors is the registered private markets fund. Interval funds and tender offer funds are closed-end funds registered with the SEC under the Investment Company Act of 1940, which brings regular public filings and investor protections that traditional private funds do not have.

Many of them are open to investors who are not accredited. Minimum investments vary by fund, but they can start around $1,000 to $10,000 for interval funds, and around $1,000 to $50,000 for tender offer funds.

Some of these funds invest directly in private equity funds, buy stakes in existing funds on the secondary market, or invest alongside private equity firms in individual companies. Others mix private equity with private credit, real estate and infrastructure.

Access is widening quickly. In June 2026, Morgan Stanley Wealth Management re-registered its private markets interval fund to remove the accredited investor requirement and lowered the minimum investment to $10,000.

The Catch: Liquidity

These funds are not ETFs, and you cannot sell them whenever you like. Neither type is listed on a stock exchange, so you can only get your money out when the fund offers to buy back shares.

An interval fund must make repurchase offers at regular intervals, every three, six or twelve months, for between 5% and 25% of its shares. A tender offer fund buys back shares only when its board decides to, so there is no guaranteed schedule at all.

If more investors want to sell than the fund will repurchase, requests are usually filled only in part. In a period of market stress, when many investors want out at once, you may get back only a fraction of what you asked for and have to wait for the next window.

That is the trade-off at the heart of every private markets product. The less often you can sell, the more freedom the fund has to hold long-term private investments, and the more patient you need to be.

Valuations and Fees in Registered Funds

Registered private markets funds are typically valued monthly or quarterly rather than every second like a listed share. The fund calculates its net asset value from estimates of what its private holdings are worth, based on models, recent transactions and information from the underlying managers.

That makes the share price look smoother than a stock market fund, but smoother is not the same as safer. Private company values are estimates, and they can lag what the same businesses would fetch in a sale.

Fees are usually higher than in index funds. Depending on the structure, you may pay the fund’s own management fee, a performance or incentive fee, and indirectly the fees charged by any underlying private equity funds it holds. Read the prospectus carefully and add every layer together before you compare the fund with anything else.

Way Four: Your Pension and Your 401(k)

Many Americans already have private equity exposure without realizing it. Public pension plans for teachers, firefighters and state employees are among the largest investors in private equity funds, so if you have a public pension, part of it may already be invested this way.

401(k) plans have been a different story. Most have offered only mutual funds, index funds and target-date funds, partly because plan sponsors have worried about legal liability for adding complex, illiquid and higher-cost investments.

That is starting to change. In August 2025, an executive order titled “Democratizing Access to Alternative Assets for 401(k) Investors” set the policy that retirement savers should have access to funds holding private market investments and other alternative assets.

On March 30, 2026, the Department of Labor proposed a rule that would give 401(k) plan fiduciaries a legal safe harbor when selecting investment options that include assets such as private equity. The proposal asks fiduciaries to weigh six factors: expected performance, fees, liquidity, valuation, benchmarking and complexity.

As of mid-2026, it remained a proposal rather than a final rule, so check with your plan and the Department of Labor’s latest guidance before assuming private equity is available to you. Where it does appear, it is most likely to sit inside a target-date or balanced fund rather than as a standalone option. If you are deciding how to prioritize your own accounts, FRC’s guide to the order to invest your money between a 401(k), IRA and brokerage account walks through each one.

Comparing the Four Routes

Listed private equity firms give you daily liquidity and the lowest cost of entry, but you own the managers, not the funds, and the shares can be volatile. Private equity ETFs add diversification across several managers and lenders, but often hold more private credit than private equity, with higher fees than a typical index fund.

Interval and tender offer funds come closest to owning private companies, with lower minimums than traditional funds, but they restrict when you can sell and usually charge more. Pension and 401(k) exposure requires no action at all, but you have little control over how much is invested or where.

The right route depends on your goals, timeline and need for access to your money. The one constant is that easier access does not reduce the underlying risks; it simply changes how they reach you.

The Risks Every Route Shares

Whichever route you choose, the same core risks apply. Fees across private equity are generally higher than in index funds, and they can take a meaningful share of returns over time.

Liquidity is limited in many products, and even listed options can fall sharply when markets are stressed. Private company values are estimates rather than live market prices, which can hide how much a holding has really changed in value.

Leverage sits behind many buyouts, and it magnifies losses as well as gains. The industry is also facing a significant exit backlog: as of June 30, 2026, PitchBook data showed 33,575 private equity-owned companies unsold worldwide, and the typical buyout is now held about seven years before it is sold, according to Bain & Company. That backlog can slow the cash that funds return to investors.

How Private Equity Products Are Regulated

Each route sits under a different regulatory framework. Listed private equity firms are public companies, so they file annual and quarterly reports with the SEC like any other listed business.

ETFs, interval funds and tender offer funds are registered investment companies under the Investment Company Act of 1940, which requires a prospectus, regular reporting, an independent board and rules on how the fund is valued and governed. Traditional private equity funds rely on exemptions from that Act, which is why they are restricted to accredited investors and qualified purchasers.

The firms that manage private funds generally register with the SEC as investment advisers under the Investment Advisers Act of 1940 once they reach $150 million or more in private fund assets in the United States. Registered private fund advisers also file Form PF, a confidential report that gives the SEC data on their funds’ size, leverage and risk.

Taxes Differ by Route

The tax treatment depends on the structure you own. Listed private equity managers such as Blackstone, KKR and Apollo now operate as corporations, so their dividends are reported on a standard Form 1099 like any other stock.

Registered funds, including ETFs, interval funds and tender offer funds, also generally report on Form 1099. BDCs typically distribute most of their taxable income, much of which is taxed as ordinary income rather than at qualified dividend rates.

Traditional private equity funds organized as limited partnerships usually issue Schedule K-1s instead, which can arrive late and make tax filing more complex. Holding private markets funds inside an IRA or 401(k) avoids annual taxes on distributions, but some structures can raise their own tax questions, so check with a tax professional before you invest.

Questions to Ask Before You Invest

Start with the most basic question: what exactly does this product own? Look at the top holdings and ask how much is actual private equity, how much is private credit, and how much is listed shares.

Next, ask how and when you can get your money back. For a registered fund, find the repurchase schedule and the percentage of shares it offers to buy back, and consider what you would do if a request were only partly filled.

Then add up every layer of fees, including management fees, performance fees and the costs of any underlying funds. Finally, ask how the product fits alongside what you already own, including any S&P 500 fund that already holds Blackstone, KKR and Apollo.

Common Questions

Can you invest in private equity without being accredited? Yes. You can buy listed private equity firms or private equity ETFs through a brokerage account, and many interval and tender offer funds are open to investors who are not accredited.

What is the minimum investment for private equity? Listed shares and ETFs can be bought for the price of a single share. Interval funds often start around $1,000 to $10,000, while traditional private equity funds usually require far larger commitments.

Are private equity ETFs real private equity? Many hold listed private equity managers, business development companies and listed investment companies rather than direct stakes in buyout funds. Check the holdings before assuming you own private equity itself.

How do you get your money out of an interval fund? An interval fund offers to buy back between 5% and 25% of its shares every three, six or twelve months. If more investors want to sell than the fund will repurchase, requests are usually filled only in part.

Can I hold private equity in my 401(k)? Most plans do not offer it yet. The Department of Labor proposed a rule in March 2026 that could make it easier for plans to include private equity, typically inside a target-date or balanced fund.

Learning How Private Equity Works Is Open to Everyone

You do not need to work on Wall Street to understand private equity. Fund structures, repurchase offers, acquired fund fees and accredited investor rules can all be learned, and understanding them is what turns a headline about private markets into a decision you can make with confidence.

FRC’s programs and memberships are open to everyone. Whether you want to understand the products you are being offered or build a career in the industry, FRC’s exam preparation and guides give you the knowledge to do both.

FRC’s Professional Membership adds structured learning, verified progress and a Digital Profile that lets employers see your development, not just read about it. The FRC dictionary, with explainer videos on the rules and regulations behind US investing, is free for everyone.

Your Next Step

Private equity is no longer only for the very wealthy. Listed firms, ETFs, interval funds and retirement plans have all opened new doors, and more are likely to follow.

But the easier the access, the more carefully you need to read what you are buying. Know what the product owns, how you get your money back, what every layer of fees costs and how it fits with what you already hold, then decide whether the trade-off is right for you.