Wealthsimple CEO Michael Katchen at Evergreen Brickworks in Toronto at the company's 'End of Banking' event in June, 2025. Wealthsimple’s fund change comes amid increased scrutiny around access to private market investments.The Globe and Mail
When Tim Burke was looking at alternative investments from Wealthsimple last November, he had no interest in the online financial platform’s private credit fund.
The Newcastle, Ont., engineer does technical advisory work on mergers and acquisitions and is familiar with private equity, which he sees as a “healthy” way to invest capital in companies with the expectation of eventual returns. But he has a dim view of private credit - non-bank lending to companies - which he sees as combining high risk with weaker performance.
Convinced by Wealthsimple’s case for its private equity fund, Mr. Burke sold some stock holdings in his RRSP and invested the minimum $10,000.
So it came as a shock this month when an e-mail from Wealthsimple informed him it was “automatically updating” his private equity investment into its new Private Market Fund, combining equity, credit and infrastructure assets.
“It was surprising to see that, given that they made a big deal out of separating private equity and private credit at the start,” Mr. Burke said. While he filled out an online form to opt out of the switch, he said he has been unable to secure confirmation of his request. According to the e-mail, investors who do not opt out before May 20 will have their holdings migrated to the new fund on June 1.
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Wealthsimple’s fund change comes amid increased scrutiny around access to private market investments, which in Canada have typically been restricted to institutions and accredited investors – those who meet high income or asset requirements. A string of high-profile freezes on withdrawals from private market funds this year has highlighted a mismatch between many retail investors’ desire for liquidity and the nature of the assets in which they are investing.
Public market investments such as stocks are easily bought and sold, but private assets are relatively illiquid. As a result, fund managers impose limits on how much investors can redeem, often around 5 per cent of a fund’s total assets per quarter.
In an e-mailed response to questions, Nima Sanajian, managing director of investments at Wealthsimple, said the shift to a single blended fund was driven by customer feedback around how to allocate investments between private credit and private equity. With the addition of private infrastructure, “we recognized that this approach was becoming increasingly complex.”
“For most clients, a single, diversified fund is a more straightforward and suitable solution than managing multiple individual funds,” Mr. Sanajian said. “We understand that this may not be ideal for everyone, which is why we’re offering private equity clients the option to opt out of the transition.”
Private credit clients cannot opt out of the new fund, which has a similar risk profile to their existing holdings, according to a question-and-answer document about the transition. New investors will not have access to the existing private equity fund, launched in 2023.
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Jean-Paul Bureaud, executive director of FAIR Canada, an investor rights advocacy group, said the transition to the new fund raises concerns around transparency and disclosure. Automatically transferring clients’ holdings “may not be acceptable to the investors because it represents a change in the objectives of the funds they originally purchased,” he said.
Wealthsimple’s informational documents about the new fund acknowledge it has a financial interest in the migration, noting that most investors will pay higher fees. Private equity investors who do not opt out of the transition will continue to pay their exisiting fees.
“It’s a pretty good deal for Wealthsimple. I guess the question is, is it a good deal for investors?” said Corry Silbernagel, managing director at Vancouver-based Bond Capital, a supplier of debt and equity capital. He said the move was nevertheless logical because the average retail investor may not understand the difference between private credit and private equity.
To invest in its private market funds, Wealthsimple requires clients to have at least $50,000 in liquid assets and to invest a minimum of $10,000. They do not need to be accredited investors.
Industry veterans say retail investors’ unfamiliarity with private assets has fuelled problems for private funds this year, with many investors rushing to redeem investments intended to be locked away for years.
U.S. private credit firm Blue Owl said earlier this month it was halting withdrawals from two funds after worries about the impact of artificial intelligence on software companies sparked US$5.4-billion in redemption requests. Other firms including Carlyle, KKR, Apollo and BlackRock have also limited withdrawals, and halts in fund redemptions, known as “gating,” have affected private credit in Canada.
Mr. Sanajian said Wealthsimple’s fund transition is not related to redemptions. A Globe and Mail review of the private equity fund’s most recent financial statements showed that while redemptions payable jumped to $5.4-million at the end of 2025 from $408,000 a year earlier, overall redemptions remained well below the 5-per cent-limit for the $430-million fund.
Wealthsimple says its new fund is designed for investors with an investment horizon of at least 10 years. Fund documents emphasize the illiquidity of underlying assets, and warn investors against using the fund for short-term savings goals.
At the same time, the company says the new fund structure will permit investors to request redemptions on a monthly basis, up to a 5-per-cent limit, compared with a quarterly schedule for the existing private equity fund. Mr. Sanajian said this is possible due in part to “a dedicated liquidity sleeve” – a part of a fund’s portfolio in cash or liquid assets – as well as cash flow from private credit and private infrastructure investments.
Wealthsimple, which brands itself as being “on a mission to democratize wealth,” says on its website that the Private Market Fund is “designed to give clients the kind of diversified exposure that institutional investors like pension funds have used for decades.”
Mr. Bureaud at FAIR Canada said he found such arguments unconvincing.
“It’s democratic in the narrow sense of expanding who can get access to these products, but it’s not democratic in the sense of enhancing people’s sense of agency,” he said.
“The average Canadian family may not be able to just simply keep their money locked up.”