Essentials of Private Markets
Learn how assets such as private equity, credit, real estate, and infrastructure can fit into investment portfolios.
Learn the basics of the major private asset classes
Essentials of Private Equity
Private equity funds invest in non-publicly traded companies, ranging from startups to large private enterprises.
Essentials of Private Credit
Private credit funds issue corporate loans and other credit instruments that do not involve a traditional bank and are not publicly traded.
Essentials of Private Real Estate
Private real estate funds invest directly in real estate properties ranging from warehouses to apartments.
Essentials of Private Infrastructure
Our products are manufactured both locally and globally. We carefully select our manufacturing partners to ensure our products are high quality and a fair value.
For Financial Professionals: Accessing Private Markets
Private markets are more accessible to individual investors today amid the rise of perpetual funds.
For Financial Professionals: Allocating to Private Assets
Private markets can be used to pursue a range of potential benefits in investor portfolios
Why Invest in Private Markets?
Private markets may provide attractive return opportunities, as well as greater portfolio diversification and lower volatility than publicly listed securities.
Allocating to Private Markets
Allocating to asset classes such as private equity, credit, real estate, and infrastructure can reshape the risks and returns of investment portfolios
Data Sources & Key Definitions (As of Dec 31, 2024)
- Traditional 60/40 Portfolio: 60% Global Equities (MSCI ACWI) / 40% Bonds (Bloomberg Global Aggregate).
- Private Markets: Based on 10-year data from industry indices (Cliffwater, NCREIF, Cambridge Associates) covering Private Credit, Real Estate, Infrastructure, and Private Equity.
- Yield Calculation: Derived from equity dividends and income from bonds, private credit, and real estate (excludes private equity).
⚠️ Risk Warning: Past performance does not guarantee future results. Figures are hypothetical and subject to market fluctuations.
Private Markets Exposure
Institutional investors have been allocating to private markets for decades. Individual investors are typically underallocated by comparison.
Sources: 2023–2024 reports from Preqin, UBS, NACUBO, and Cerulli Associates.
Data Scope (Dollar-Weighted Averages):
- US Family Offices: Reflects Private Equity allocations only.
- US Public Endowments: Includes all Alternative Strategies (Hedge Funds, Private Equity, Venture Capital, and Real Assets).
Manager Selection Matters
Selecting the right manager is critical to ensuring the right outcome. Key manager attributes would include scale, staying power and a long track record. As results are never guaranteed, a focus on manager selection can increase the probability of achieving intended goals, and decrease the possibility of selecting an inexperienced manager or a strategy that does not fit the objectives.
However, education is also essential. Greater availability of private market investments requires a fuller understanding of their benefits and risks, which can include their tendency to invest in illiquid assets, their greater complexity, lower transparency vs. public markets, and a wider range of potential outcomes. The right long-term partner must commit to broadening investors’ understanding of private markets and what they can bring to the overall investment strategy.
Considerations Before Allocating
Private market investing is built on long-term ownership of less liquid assets, where meaningful value creation requires time, active engagement, and strategic execution. Before allocating capital to private equity, investors should carefully consider their overall portfolio objectives and liquidity requirements.
Given the wider range of potential outcomes compared to public markets, selecting the right investment manager is a critical factor in achieving long-term success. Key considerations include the manager’s scale, investment experience, operational capabilities, and proven track record across different market cycles.
Frequently
asked questions
What are private markets?
Private markets are investments that are not traded on public exchanges, such as stocks or bonds, and instead involve directly investing in or lending to private companies or real assets. These investments commonly include private equity, private credit, real estate, infrastructure, and are typically structured for long‑term investors seeking diversification and differentiated sources of return beyond public markets.
What are the major differences between public and private markets?
The primary differences between public and private markets relate to liquidity, access, and investment horizon. Public market investments are generally bought and sold daily, while private market investments are less liquid, valued periodically, and often require longer capital commitments, which may allow for more active management and exposure to different economic drivers.
Who invests in private markets?
Private markets have traditionally been dominated by institutional investors such as pension funds, endowments, and foundations. Today, access has expanded, and eligible individual investors are increasingly allocating to private markets as part of a diversified portfolio strategy.
How can individual investors access private markets?
Eligible individual investors can access private markets through professionally managed investment vehicles, typically available via financial advisors. These structures are designed to simplify participation while providing exposure to private market strategies, though they may require a long‑term outlook and may have specific eligibility requirements.
What are the primary asset classes within private markets?
The main private market asset classes include private equity, private credit, real estate, and infrastructure, each offering exposure to different types of companies and assets. Together, these asset classes can provide diversification and access to return drivers that differ from traditional public market investments.
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