Wealthsimple Inc. has launched a new service to offer retail investors exposure to private equity. 

On Wednesday, the Toronto-based fintech company said it partnered with LGT Capital Partners, a wealth management group for the Liechtenstein royal family, in order to roll out the service called Wealthsimple Private Equity.

Wealthsimple said there are inherent risks involved, but the asset class could provide “high returns” for investors with long time horizons. 

“We’re making Wealthsimple private equity available to clients with $100,000 or more in deposits, a long enough time horizon to ride out volatility, and enough flexibility to deal with the fund’s relative illiquidity,” the written announcement said. 

Private equity funds look for companies thought to be “well-positioned to increase in value,” and acquire those companies for a period of time, make improvements and sell them at a higher price, the announcement said. 

Wealthsimple’s private equity offering comes as private markets are becoming more accessible to retail investors. 

The size of private markets for both debt and equity has risen over the last 10 years, as many firms have moved away from traditional finance. That trend has prompted fund managers to market alternative investments to more retail investors. 

Wealthsimple cautioned that the private equity asset class comes with associated risks including liquidity risks, meaning investors are not always able to easily access their holdings, as well as a lack of index funds as the asset class lacks the ability to invest in the overall market.

With files from the Canadian Press