In conversation with Robin Binder
Robin Binder, Founder and CEO of NAO, on why access is the real barrier to private markets investing.
Read time: 2:30 Minutes
Robin Binder, Founder & CEO of NAO, joined FIBE’s Club Stage for a panel discussion titled “Private Markets - From Elite to Mainstream?”. He then stayed on to answer a few more questions.
Robin, on stage you said there’s an opportunity for everybody, and that more money doesn’t mean more expertise. Can you elaborate on that?
Robin Binder: I worked for about a decade in institutional banking and for a family office, investing as an institutional investor. I recognized that allocating into private markets makes a portfolio more resilient. You reduce portfolio volatility and can increase return potential at the same time.
I thought a lot of people are missing out on these opportunities due to lack of access. So, we created a solution without a minimum investment at NAO. You can theoretically start from €1.
Why €1? Historically, the minimum to qualify as a semi-institutional investor and access private markets was €200,000. I strongly disagree with that regulatory framework because I don’t think a big amount of money makes you smarter or a better investor. It’s about knowledge.
So, we got rid of minimum investments, which is possible with the ELTIF 2.0 framework. Everybody can learn by doing. They can invest in products, experience how they work, and educate themselves. That’s what makes you a better investor, not what your bank account looks like.
On the back of that, you also said that if you become greedy, you make bad decisions. Can you elaborate on that?
Binder: That’s my experience with a lot of retail investors. They often start with small amounts, which is great. Starting early, even with small amounts, helps you create wealth over time.
But a lot of people have the wrong goal. They focus on nominal returns. If you start with €100, making €100 profit in a year is 100 percent. That’s almost impossible without very high risk.
If you have a higher amount, like €100,000, it’s very easy to make €100. So, I think people should focus more on relative returns and portfolio stability.
For that reason, it can be beneficial, even with very small amounts, to start with private markets because you can increase the relative return potential of your portfolio.
The panel (consisting of Thorsten Kud (Carbon Equity), Romain Grimal (BlackFin Capital Partners)) was very bullish about private markets becoming mainstream by 2030, especially in the context of new EU regulation opening access to retail investors. Why do you think that is?
Binder: I think it’s a huge opportunity. We have a pension gap, especially in Germany, and there are initiatives that just got kicked off.
Private markets are a great solution to allocate retail money that is currently sitting in savings accounts. On one hand, you can activate that money over time to create long-term wealth for pensions and help close the pension gap, with governmental support like tax incentives.
On the other hand, it can make Europe more competitive. That’s one of the motivations behind the European long-term investment fund initiative from the European Commission. The idea is to mobilize retail money so it can flow into infrastructure, modernize Europe, and improve competitiveness compared to other regions.
It also strengthens the venture capital environment. Retail money can be invested directly into innovation. In Europe, more than 90 percent of companies are not publicly listed, so they don’t have access to retail capital yet.
With the ELTIF 2.0 framework, the updated EU regulation that expands retail access to private markets, and venture capital investments, these companies can access a large amount of currently unproductive money.