What are Private Investments?
Private investments refer to investments made in private companies that are not publicly traded on a stock exchange. Private investments are typically made by high-net-worth individuals, venture capitalists, and private equity firms.
Private investments can take many forms, including equity investments, debt investments, or a combination of both. Equity investments involve buying ownership in a company, while debt investments involve lending money to a company with the expectation of receiving interest payments and eventual repayment of the principal.
Private investments can offer investors the potential for higher returns than public investments, but they also typically carry higher risks due to the lack of publicly available information about the company and the absence of regulatory oversight. Private investments can also be illiquid, meaning that it may be difficult to sell the investment and get your money back quickly.
What are the Different Kinds of Private Investments?
How Can Private Investments Benefit your Portfolio?
Potential for Higher Returns
Lower Correlation to Public Markets
What are the Risks of Private Investments?
Lack of Liquidity
Difficulty in Valuation
Private investments are often difficult to value, as there is no public market for the investment. This can make it challenging to accurately assess the investment's worth and determine an appropriate price.
It's important for investors to carefully evaluate the potential risks and benefits of private investments before investing. Investors should also work with a qualified financial advisor who can help them assess the risks and determine whether private investments are appropriate for their investment goals and risk tolerance. Additionally, private investments are generally only available to accredited investors who meet certain net worth and income requirements.
How Do I Know if I Should Consider Private Investments?
Determining whether private investments are right for you depends on a number of factors, including your investment goals, risk tolerance, and financial situation. Here are some questions to consider when deciding whether to look into private investments:
- What are your investment goals? Private investments can be attractive to investors seeking higher potential returns and diversification beyond traditional publicly traded stocks and bonds. If your investment goals align with these objectives, private investments may be worth exploring.
- What is your risk tolerance? Private investments are generally considered to be riskier than publicly traded investments due to their lack of liquidity and limited information. If you are comfortable taking on higher levels of risk in pursuit of potentially higher returns, private investments may be appropriate for you.
- What is your financial situation? Private investments often require a significant amount of capital, and are typically only available to accredited investors who meet certain net worth and income requirements. If you have the financial resources to invest in private opportunities and are comfortable with the risks, private investments may be a suitable option.
- Have you worked with a qualified financial advisor? Private investments can be complex and challenging to evaluate. It's important to work with a qualified financial advisor who can help you assess the risks and determine whether private investments align with your investment goals and risk tolerance.
Ultimately, the decision to invest in private investments should be based on a careful evaluation of the potential risks and benefits, as well as an understanding of your own investment goals and risk tolerance. If you are interested in exploring private investment options, you can use this form to get in touch with one of our advisors.
Important Disclosure Information
Past performance may not be indicative of future results. Different types of investments involve varying degrees of risk, and there can be no assurance that the future performance of any specific investment, investment strategy, or product (including the investments and/or investment strategies recommended or undertaken by Chicago Partners Investment Group LLC (“CP”), or any non-investment related content, made reference to directly or indirectly in this commentary will be profitable, equal any corresponding indicated historical performance level(s), be suitable for your portfolio or individual situation, or prove successful. Due to various factors, including changing market conditions and/or applicable laws, the content may no longer be reflective of current opinions or positions. Moreover, you should not assume that any discussion or information contained in this commentary serves as the receipt of, or as a substitute for, personalized investment advice from CP. Please remember to contact CP, in writing, if there are any changes in your personal/financial situation or investment objectives for the purpose of reviewing/evaluating/revising our previous recommendations and/or services, or if you would like to impose, add, or to modify any reasonable restrictions to our investment advisory services. CP is neither a law firm nor a certified public accounting firm and no portion of the commentary content should be construed as legal or accounting advice. A copy of the CP’s current written disclosure Brochure discussing our advisory services and fees continues to remain available upon request.