Introduction to Private Equity

Benefits of private equities

Now, private equities offer a completely different set of advantages. First off, there's the potential for outsized returns. When you get in early with a company that later goes public or gets acquired, the payoff can be substantial—we're talking multiples of your initial investment rather than just percentage points.

Private investments also move to the beat of their own drum. They're much less correlated with public markets, which means they can provide genuine diversification in your portfolio. When the stock market's having a meltdown, your private investments might be cruising along just fine, blissfully unaware of the chaos elsewhere.

There's something uniquely satisfying about private equity too—you're often investing in companies at a stage where your capital makes a real difference. You're not just buying a stock; you're potentially helping fund the next breakthrough product or service. And depending on the investment, you might even get some say in how things are run, especially with smaller startups or local businesses where investors sometimes wear multiple hats as advisors or mentors.

What about risks? How does Public Equity compare?