By Tyler C. Gilley, CFP®, AIF®, Wealth Advisor at Halbert Hargrove.
As fiduciaries, one of our many roles is to stay abreast of the ever-evolving market landscape. This means we are regularly looking for investments that provide the possibility of enhanced diversification and long-term returns. One such opportunity that has become more prevalent in recent years is private equity. But what exactly is private equity, and how might it benefit your portfolio?
What Is Private Equity?
Private equity involves investing directly in privately-owned companies, unlike public stocks traded on exchanges like the NYSE. As of February (Source: Hamilton Lane via Capital IQ) This means investors focusing only on public stocks miss out on a significant portion of the market.
Private equity differs from venture capital, which typically focuses on early-stage companies that have a high growth potential but might not yet be profitable, implying a higher degree of risk. Private equity, on the other hand, focuses on making larger investments in more well-established companies in an attempt to increase efficiency and profitability.
Why Invest in Private Equity?
- The Possibility of Higher Returns: Historically, private equity has outperformed public markets over the long run thanks to active management and strategic improvements brought about by the private equity firm (though past performance does not guarantee future results).
- Diversification: It offers a way to diversify your portfolio beyond public markets. This can help reduce exposure to market volatility.
- Access to Unique Opportunities: Private equity offers access to unique growth-oriented investments that may be otherwise unavailable in a traditional investment portfolio.
However, it’s crucial to understand the risks and restrictions before investing. Consult your Halbert Hargrove advisor to see if private equity fits your investment strategy.
How To Invest in Private Equity
For clients who meet certain criteria – like a net worth test – the minimum investment into one such solution is $50,000.
Register using this link: Register
Disclosure:
Halbert Hargrove Global Advisors, LLC (“HH”) is an SEC registered investment adviser located in Long Beach, California. Registration does not imply a certain level of skill or training. Additional information about HH, including our registration status, fees, and services can be found at www.halberthargrove.com. This blog is provided for informational purposes only and should not be construed as personalized investment advice. It should not be construed as a solicitation to offer personal securities transactions or provide personalized investment advice. The information provided does not constitute any legal, tax or accounting advice. We recommend that you seek the advice of a qualified attorney and accountant.
The views contained herein are not to be taken as advice or a recommendation to buy or sell any investment. Any forecasts, figures, opinions or investment techniques and strategies set out are for information purposes only, based on certain assumptions and current market conditions and are subject to change without previous notice. There is no guarantee any forward-looking statement will come to pass. All opinions or views reflect the judgment of the author as of the publication date and are subject to change without notice. All information presented herein is considered to be accurate at the time of writing, but no warranty of accuracy is given and no liability in respect of any error or omission is accepted. This material should not be relied upon by you in evaluating the merits of investing in any securities or products mentioned herein. In addition, the Investor should make an independent assessment of the legal, regulatory, tax, credit, and accounting and determine, together with their own professional advisers if any of the investments mentioned herein are suitable to their personal goals. Investors should ensure that they obtain all available relevant information before making any investment. It should be noted that the value of investments and the income from them may fluctuate in accordance with market conditions and taxation agreements and investors may not get back the full amount invested. Both past performance and yield may not be a reliable guide to future performance. Any reference to a market index is included for illustrative purposes only as it is not possible to directly invest in an index.
