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Historically, being able to invest in the private equity asset class has been restricted to institutional and accredited investors. Unfortunately, accreditation rules alone cut out of 95% of the investor population, and even those who do qualify as accredited find it difficult to gain access to world-class private businesses. Based in Toronto, Stack Capital Group Inc. (“Stack Capital”) completed its initial public offering in June 2021, and its mission is to change the status quo by ‘democratizing’ access into the private equity asset class for all investors.
By virtue of its structure as a publicly listed company (TSX:STCK), Stack Capital has eliminated the biggest barriers to entry into these opportunities – namely, eligibility and liquidity.
“Let’s face it – the reality is that most investors don’t qualify as accredited, don’t have large amounts of capital to deploy, and can’t afford to be locked into an investment for an indefinite period of time”, said Jeff Parks, CEO of Stack Capital. “In our opinion, that shouldn’t mean that they can’t participate in this attractive segment of the market. We’re here to change that.”
Any investor, regardless of size or wealth, can own shares of Stack Capital and, by extension, gain access to a diversified portfolio of growth and late-stage private businesses. In addition, investors have the flexibility to hold shares of Stack Capital across any type of account including RRSPs, RRIFs, RESPs, TFSAs and non-registered. With respect to liquidity, investors can buy or sell shares of Stack Capital in the open market, which is unlike most other private equity investments, where they are locked-in for an extended period or restricted as to when a position can be purchased or sold.
“We firmly believe that being able to invest in some of the world’s most innovative and disruptive private businesses needs to be more inclusive”, said Jeff Parks, CEO of Stack Capital. “The vast majority of investors could benefit from exposure to this asset class, which would enable them to enhance diversification and ultimately build better portfolios. Stack Capital was designed specifically to eliminate the traditional barriers to entry into private equity, allowing any investor to participate in the future growth of a diversified portfolio of world-class businesses.”
Over the past several weeks, Stack Capital has announced three investments that comprise its first set of attractive portfolio companies. The first was Varo Bank, the first and only fintech with its own US bank charter which operates without any physical branches (lowering the cost to serve) and offers a wide array of products, including loans, to its clients. The second was Bolt Financial, a global leader in the One-Click checkout process that connects thousands of online retailers with millions of shoppers in a unified network, simplifying the online buying process for both. With over 10 million registered shopper accounts, the company appears to be at an inflection point for future growth. The most recent portfolio investment involved Space SPV, which provides shareholders with exposure to the world’s largest private aerospace manufacturer, space transportation services, and satellite communications company – and clear leader in the emerging “space economy”. Stack Capital is very bullish on the prospects for its satellite communications business over the coming years and believes that the decision to build a satellite constellation will ultimately result in a large amount of free cash flow for shareholders.
Moving forward, Stack Capital will continue to seek out and invest in highly sought after, growth and late-stage pre-IPO businesses; and serve as a one-stop solution for all investors seeking to gain exposure to this attractive asset class. Additional information concerning Stack Capital and its investment portfolio can be found by clicking here, or at www.stackcapitalgroup.com/investment.
