Private investments

Private markets encompass investment opportunities in privately-held companies and non-public assets that are not traded on stock exchanges. This includes private equity, venture capital, real estate, infrastructure, and private debt. In these markets, investors acquire ownership stakes or invest in assets that are not easily accessible to the public.

Benefits

Private Equity

Venture Capital

Definition

Private equity is capital invested in an established company or other entity that is not publicly listed or traded
Venture capital is funding given to startups that show potential for long-term growth

Types of companies

Stable, established companies across a wide spectrum of industries that are performing well
Early-stage companies that have very high growth potential, such as some companies in high/information technology and biotechnology

Size of investment

Typically, larger than venture capital investments but can range from several million to billions of dollars depending on the target company
Typically smaller than private equity and initially between $1 and $10 million

Structure of investment

A combination of equity and debt
Cash and equity investment or convertible debt that turns into equity

Ownership profile

Control investments, typically in excess of 50%
Minority investments often among a group of minority investors

Return profile

More stable return profile with less volatility than venture capital
Higher risk investments with a broader set of outcomes - from “home runs” to total loss of investment

Risks & liquidity

Private equity and venture capital investments entail certain risks and considerations. They are influenced by market conditions and economic fluctuations, and typically have longer liquidity timelines. It is crucial for investors to carefully evaluate these factors before engaging in these investment types.