Private Equity
Ownership in companies that are not listed on a public exchange.
Private equity funds buy, improve and sell businesses over multi-year holds. Most vehicles require accredited investor status.
Private equity funds buy, improve and sell businesses over multi-year holds. Most vehicles require accredited investor status.
Reported returns use IRR, which is not directly comparable to a public market total return.
Key concepts to master
- 01.Total cost of ownership, including fund fees and platform fees
- 02.Liquidity: when, and on what terms, you can get your money back
- 03.Tax treatment and which account type this belongs in
- 04.How this exposure overlaps with what you already own
Common mistakes
- ×Sizing a position based on recent performance rather than a written plan
- ×Confusing infrequent valuation with genuine stability
- ×Ignoring the tax drag of frequent trading in taxable accounts