Equity Offerings, Private and Public

What's halfway between public equity and private equity? Goldman Sachs is trying to fill that gap, with a new system called GS TRuE -- short for Goldman Sachs Tradable Unregistered Equity. Institutional investors can use the platform to trade equity in unlisted companies, starting with Oaktree Capital Management LLC, an alternative-investment manager. So long as there are fewer than 500 shareholders in all, there are no SEC listing requirements -- which, of course, means that investors have no SEC protection.

This certainly looks like it's the equity equivalent of loans without covenants, and other signs of the impending apocalypse. On the other hand, if there's demand for this product, it would be rude for Goldman Sachs not to meet that demand.

Interestingly, GS TRuE was launched on the same day that Australia's Platinum Asset Management went public, catapulting founder Kerr Neilson into the ranks of Australia's richest men. While Goldman concentrates on institutional investors, however, Platinum restricted participation in its IPO to retail investors – a strategy which seems to have paid off in spades.

Increasingly, retail investors are being locked out of some of the most exciting investment opportunities in the world. If Kerr Neilson can find a way to help those people out, he deserves his billionaire status.