How To Investing In Secondary Private Equity

Investment options are many in this world. A man who wishes to take a risk and seek a fast return might invest in the share market. Those people who are afraid of share market risk can invest in indices. The people who seek principal safety have the option of investing in precious metals, government bonds, and debentures. Other schemes for investments are health-related and pension-related ones. A state might have many such investment options for its public. When it comes to high investments, secondary private equity funds are preferable. However, it has high risk than other investment options. Here we have discussed the ways to invest in a secondary private equity fund.

Private Equity Funds

They are either known as secondaries. It is secondary as it is not like the primary financial market. Either it is a not regulated market like the primary financial market. Hence, it is called secondary or secondaries private equity funds. The first registered firm came into existence in 1979 by Equistone Partners Europe in London, UK. Today there are hundreds of secondary private equity firms across Europe and the United States.

Who can invest in secondary private equity?

The investors in the secondary market are very high net-worth individuals. Either, they are milliners, billionaires, rich businesspeople, popular artists, highly paid IT professionals, highly paid actors, and affluent business people helping other business people by investing in private equities.

  • A person having $ $ 250,000 can invest with a private equity secondary market manager.
  • $ 25 Million is the minimum investment limit to apply with a private equity firm.

Thus, the secondary market is not meant for the common man or ordinary earning people. Here, a high net-worth person has to invest up to 10-years in such funds.

An average earning person from the primary market will no invest in this fund even he got some lottery. Yes, this fund is as such, as it is meant for financially sound people only. They are not bothered by short-term investment. They seek a higher yield in the long run.

Investment Banking Private-Equity

If you do not trust third-party agents in the secondary market, the best way to invest is through investment bankers. They are as follows.

  • AAC Capital Partners
  • Baring Vostok Capital Partners
  • Capvis
  • PAI Partners
  • Trimaran Capital Partners
  • Willis Stein & Partners
  • MidOcean Partners
  • Macquarie Infrastructure and Real Assets
  • Bridgepoint Capital
  • Affinity Equity Partners

These are registered entities and a subsidiary of major banks. Hence, you can trust them, as they will not cheat with your investments in private equities.

Private Equity Firms

  • The Blackstone Group
  • Bain Capital
  • Hellman & Friedman
  • EnCap Investments
  • General Atlantic
  • Silver Lake Partners
  • Permira

A secondary equity market manager manages these private firms.

Risk of Private Equity Funding

A $ 25 million investment is a high risk only for any investor. Moreover, the timeline of 10-years is also high. Here, the invested company is not a listed one in the primary market. Hence, the chances of leverages are many. They might close their group and invest in new business. Moreover, they might try a new business. Here, your invested funds are to clear their debt or raise capital.

These are the potential reasons why a person wishes to take this very high risk by investing in private equities. However, some enjoy the title and ownership for a limited time only or up to; or they hold their investment in such companies. In this modern world or the web-enabled world, this type of secondary market does function in parallel to the primary regulated market. We hope some regulation will come under private equity as many investors are escaping from paying tax. Now a day, this funding is like investing black money to make them white in the future.

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