7 Proven Ways How to Invest in Private Equity Funds as an Accredited Investor (2026 Guide)

The Velvet Rope Has Lifted: Private Equity in 2026

For decades, private equity (PE) was the exclusive playground of institutional giants—pension funds, endowments, and sovereign wealth funds. If you weren't writing a check for $10 million or more, you were effectively locked out of the asset class that has historically outperformed the S&P 500 over long horizons.

But as we move through 2026, the landscape has shifted dramatically. Technology, regulatory updates, and a hunger for alternative assets have democratized access to private markets. Today, learning how to invest in private equity funds as an accredited investor is no longer about knowing the right handshake at a country club; it is about navigating a sophisticated ecosystem of digital platforms, feeder funds, and secondary markets.

This comprehensive guide will walk you through the seven most effective strategies to access this asset class, the specific risks involved, and the due diligence required to protect your capital.

Step 1: The "Golden Ticket" – Confirming Your Accredited Status

Before you can review a single pitch deck, you must cross the regulatory threshold. Private equity funds are typically unregistered securities under Regulation D of the Securities Act, meaning they are exempt from the strict reporting requirements of public stocks. To participate, the SEC requires you to be an "accredited investor."

As of 2026, you generally qualify if you meet one of the following criteria:

• Income: You have an annual income exceeding $200,000 (individually) or $300,000 (with a spouse or spousal equivalent) for the last two years and expect the same this year.
• Net Worth: You have a net worth exceeding $1 million, either individually or jointly, excluding the value of your primary residence.
• Professional Licenses: You hold a Series 7, Series 65, or Series 82 license in good standing.
• "Knowledgeable Employees": A newer expansion allows certain employees of private funds to invest in their employer's funds without meeting the strict income/net worth tests.

Pro Tip: Recent 2025 SEC guidance suggests that for certain offerings, a high minimum investment (e.g., $200,000 for individuals) can serve as a primary factor in verifying your status, streamlining the paperwork significantly.

7 Ways to Invest in Private Equity

1. Digital Private Equity Platforms

The most significant change in the last five years is the rise of fintech platforms that aggregate capital from individual investors to write large checks into top-tier PE funds. These platforms effectively act as massive "feeder funds," lowering the minimum investment from millions to as low as $20,000 or $50,000.

• Moonfare: A leader in the space, offering access to top-quartile funds like KKR, Carlyle, and EQT with lower minimums. They perform rigorous due diligence before listing a fund.
• Yieldstreet: While known for art and legal finance, Yieldstreet has aggressively expanded into private equity and private credit, often allowing entry for as little as $10,000.
• CAIS & iCapital: These are typically used by financial advisors rather than direct consumers, but if you have a wealth manager, asking them to access funds via iCapital is a primary route.

2. The Secondary Market (Pre-IPO Trading)

Private equity isn't just about buying into a new fund that will buy companies; it's also about buying stakes in late-stage private companies before they go public. This is often called the "secondary market."

Platforms like Hiive, EquityZen, and Forge Global allow accredited investors to buy shares of private companies (like SpaceX, Stripe, or Databricks) directly from early employees or early investors who want to cash out.

Why do this? The "J-Curve" (the period of negative returns in early PE years) is shorter because the companies are already mature. However, valuations can be steep.

3. Direct Co-Investment

Co-investing is the holy grail for many sophisticated investors. This occurs when a PE firm (the General Partner or GP) invites Limited Partners (LPs) to invest directly into a specific deal alongside the main fund.

The Benefit: Co-investments often come with reduced fees (sometimes 0% management fee and reduced carried interest) because the GP wants to close the deal without using up all their fund's capital.
The Catch: You usually need to be an existing heavy hitter in the fund to get the invite, though some online platforms are now offering syndicated co-investment opportunities.

4. Traditional Feeder Funds via Wealth Managers

If you bank with Goldman Sachs, J.P. Morgan, or Morgan Stanley, you don't need an app. These banks create internal "feeder funds" for their private wealth clients.

For example, the bank might raise $100 million from its clients to invest in Blackstone's latest buyout fund. As an investor, you pay a fee to the bank (load fee) plus the underlying fees of the PE fund. While expensive, this is the most "white-glove" service available and grants access to funds that otherwise wouldn't look at individual investors.

5. Publicly Traded Private Equity (The Liquid Option)

Technically, this isn't investing in a private fund, but investing in the managers of the funds. Firms like Blackstone (BX), KKR & Co (KKR), and The Carlyle Group (CG) are public companies.

By buying their stock, you profit from the management fees and performance fees they collect. You also get liquidity—you can sell your shares anytime. Alternatively, ETFs like the Invesco Global Listed Private Equity ETF (PSP) hold a basket of these firms.

6. Fund of Funds (FoF)

A "Fund of Funds" is exactly what it sounds like: a manager raises capital to invest in a portfolio of other private equity funds.

Pros: Instant diversification. Instead of betting on one manager, you get exposure to 10-20 managers across different strategies (buyout, growth, venture, distressed).

Cons: The "double fee" layer. You pay the FoF manager (often 1% management / 10% carry) on top of the fees charged by the underlying funds. This can significantly drag down net returns.

7. Search Funds

A niche but growing area for accredited investors is the "search fund" model. Here, you back a young, aspiring entrepreneur (the "searcher") with a small amount of capital to fund their search for a single small business to acquire and run.

Once they find a target, you have the right to invest a larger amount to fund the acquisition. This is "micro-private equity" and offers high potential returns, though the risk is concentrated in a single operator and a single asset.

The Cost of Admission: Fees and Structures

Understanding how to invest is useless if you don't understand the fee structure. Private Equity is expensive.

• Management Fee: Typically 1.5% to 2.0% of committed capital annually. This pays the lights and salaries at the PE firm.
• Carried Interest ("Carry"): This is the performance fee. The firm usually takes 20% of the profits after they have returned your capital and achieved a "preferred return" (often 8%).
• The J-Curve: In the first 3-5 years, cash flows out of your pocket (capital calls) to buy companies. The fund value may even dip initially due to fees. Profits usually don't appear until years 5-10 when companies are sold.

Due Diligence Checklist for 2026

Before wiring funds, run this 5-point check:

1. Vintage Year Diversification: Don't dump all your money into 2026 funds. PE performs differently depending on the economic cycle of the launch year.
2. Net vs. Gross IRR: Marketing decks flash "Gross IRR" (returns before fees). Always ask for "Net IRR" (what you actually keep).
3. Total Value to Paid-In (TVPI): IRR can be manipulated by the timing of cash flows. TVPI tells you the simple multiple of money (e.g., 1.5x) the manager has generated.
4. Skin in the Game: How much of their own money is the GP investing? You want to see at least 2-5% of the total fund coming from the partners' pockets.
5. Lock-up Period: Can you afford to not touch this money for 10 years? Secondary markets exist, but selling early often means taking a 20-30% "haircut" (discount).

Conclusion

Learning how to invest in private equity funds as an accredited investor is a journey from public liquidity to private opacity. The trade-off is clear: you accept illiquidity and high fees in exchange for the potential of outsized returns and portfolio diversification that is uncorrelated with the daily volatility of the stock market.

Whether you choose a digital platform like Moonfare, a secondary market like Hiive, or a traditional wealth management feeder, the key is patience. Private equity is not a get-rich-quick scheme; it is a get-wealthy-slowly strategy.