Private Equity

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Jun 6, 2006 9:39 pm

What is your experience with Private Equity Deals.  Do you find it
difficult to keep the clients' patience in tact?  Despite the
obvious, what are some of the big benefits to working with them?

Jun 8, 2006 2:08 am
rightway:

What is your experience with Private Equity Deals.  Do you find it difficult to keep the clients' patience in tact?  Despite the obvious, what are some of the big benefits to working with them?


My experience with these deals is only in the last 3 or so years, so I am hardly a wise veteran, but I do have strong opinions on this..


In my opinion, private equity is the ONLY alternative investment worth using. However, one of the reasons that clients should have only 10 or so percent of their portfolio in private equity relates to the illiquidity of the investment.


Private equity can be really hit and miss, so I would argue that you want to have a client in three or more funds.


You should also check and see if the client has opportunities to invest in private equity opportunities in a more direct way - either through their employer or a relationship with someone at a venture capital fund. The fees are pretty hefty when you go through a full service brokerage...