Wholesale investor: What does it mean to be one?
In the diverse investment ecosystem, wholesale investors often don’t get as much spotlight as retail investors. Yet, certain advanced opportunities – like the Merx Wholesale 1 PIE Trust – are only available for this group of experienced and knowledgeable investors.
So, if you’re considering whether you are one, this quick guide can help you understand what it entails and the benefits attached.
What’s a wholesale investor?
Broadly speaking, a wholesale investor is an individual or entity with enough financial experience and understanding to assess investment opportunities independently. Compared to retail investors, wholesale investors are considered to have more in-depth knowledge about financial markets, which enables them to venture into more complex and higher-risk investments.
The reason is simple. As the Financial Markets Authority explains here, wholesale investment offers don’t have the same protections as their retail investor counterparts. For example, wholesale investment offers don’t require a Product Disclosure Statement (PDS) or enable access to a free independent dispute resolution scheme. On the other hand, of course, wholesale investment providers must still comply with ‘fair dealing’ requirements, meaning any claims they make, or information they provide, can’t be misleading or unsubstantiated.
What are the benefits and risks?
As we mentioned earlier, the main benefit of being a wholesale investor is access to a broader spectrum of investment opportunities.
Wholesale investors are not restricted to retail investment offers and can participate in higher-risk investment options that typically aren’t available to less experienced investors. Alongside a higher level of risk, these wider-ranging investment opportunities also offer the potential for attractive returns.
Once again, it’s important to note that the wholesale investor designation is only for investors with the appropriate financial knowledge and experience to make suitable investment decisions, as they are not receiving regulated financial advice.
Are you a wholesale investor looking for the next opportunity?
At Merx, we have established the Merx Wholesale 1 PIE Trust as a distinctive opportunity for likeminded wholesale investors. As long-time investors ourselves, we agreed that we’d want a debt fund that prioritised aligned interests, delivered diversification within a single asset class, and offered both flexibility and tax efficiency.
After surveying the market and finding that no other fund offered all four points, we decided to bring that fund structure to life ourselves: the Merx Wholesale 1 PIE Trust.
Like to know more? Click here to learn more and give us a call on 09 215 9364 to discuss further. We look forward to hearing from you.
Note: This article is intended to provide general information and does not constitute financial advice. We recommend you speak with a financial adviser for advice tailored to your individual circumstances. Potential investors with Merx must qualify as Wholesale Investors as that term is defined in sections 3(2)(a) – (c) or 3(3)(a) of Schedule 1 of the Financial Markets Conduct Act (“FMCA”). The Trust is not suitable for retail investors.
Returns Since Inception
Returns based on an actual company investor account with net returns re-invested monthly. Past performance is not a guarantee of future performance. The fund was established 30 June 2022 and made its first investments in September 2022.