Private equity is becoming a more popular alternative to preserving capital as public markets face macroeconomic headwinds. In this article, we dive into why it is an attractive option for family offices and examine the three most common ways family offices can get involved.
What is private equity?
Private equity is an alternative investment class in which investors buy shares in privately held companies. Their primary goal is to generate higher returns that outperform public markets. Think of them as high risk, high reward. And in the perfect scenario, that would be the equivalent of investing in Steve Jobs and Steve Wazneyick in the 70s before Apple Inc went public in 1980. As an alternative investment, private equity is not accessible to the public, as their financial information is not subject to regulatory oversight. Instead, access is limited to institutional and accredited investors with a minimum of $250 000 to participate in private funding rounds.