The Vanguard of Alts

By: Gridline Team | Published: 07/12/2022
Est. Reading Time:
3 minutes

John Bogle, the founder of Vanguard, has been called “the father of indexing." In 1976, he launched the Vanguard 500 Index Fund, which tracked the performance of the Standard & Poor's 500 Index.

This was a revolutionary idea at the time. Before this, most investors only had access to mutual funds that fund managers actively managed. These funds typically came with high fees and didn't always perform as well as their benchmark indices.

Bogle realized he could offer investors a low-cost way to get diversified exposure to the equity market. With the launch of the Vanguard 500 Index Fund, Bogle disrupted the mutual fund industry. He showed that offering investors a better product at a lower cost was possible. And in doing so, he helped make investing more accessible for everyone. 

Today, Vanguard is one of the largest asset managers in the world, with over $7 trillion in assets under management. The company offers various products, including index and exchange-traded funds (ETFs). 

The Rise of Private Markets

Economists admit that the rampant inflation of the past year isn't transitory, and it’s possible we haven’t seen the worst. This has renewed a flight to private markets where investors seek assets that can protect their purchasing power and generate real returns. 

But it's not just inflation driving this move into private markets. Even with interest rates rising from historically low levels, they still provide extremely low returns. This means that investors are searching for yield in other places. 

Private equity, real estate, and other illiquid assets have historically outperformed public markets. For example, over the past two decades, annual leveraged buyout returns outpaced global equities by more than 10 percent on average.

Institutional investors have been allocating more of their portfolios to private markets in recent years as they seek higher returns. As individual investors become more sophisticated, they're also starting to allocate more of their assets to alternatives. 

However, investing in private markets has traditionally been difficult for individuals. The process is often convoluted and time-consuming. And because these assets are not traded on public exchanges, they can be difficult to value. 

Moreover, minimum contributions for private equity and real estate funds can be quite high. For example, some private equity funds have minimums of $25 million or more. This effectively shuts out many individual investors from these types of opportunities. Further, considering the importance of diversifying across funds, these high minimums limit an investor's ability to build a diversified portfolio. 

The Gridline Advantage

Gridline was founded to make alternative investments more accessible for everyone. The company has created a platform that allows investors to discover, track, and invest in private equity, venture capital, and other alternative assets. 

Gridline has also digitized the process, from sourcing deals to investment committee approval. This streamlines the process and makes it much easier for potential investors to get involved. 

But perhaps most importantly, Gridline has lowered the minimum contribution requirements for many of its funds. This enables a wider range of investors to access these assets. And because Gridline offers a diverse selection of funds, investors can build a well-diversified portfolio without committing a large amount of capital. 

In many ways, Gridline is following in Vanguard's footsteps. Like Vanguard, Gridline is focused on making investing more accessible for everyone. And by offering a better product at a lower cost, Gridline is changing the investing landscape. 

Try out Gridline today and see how easy investing in private markets can be.

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