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Is it a bad idea to heavily weigh my portfolio in financial holding companies that invest mostly in private equity?
It's the only way I can thinking of to have my low amount of capital touch the private equity market and if you look at performance historically, private always beats public.
I guess there is more risk with under-regulation in the private equity sector, but from prior experience working as a Big 4 auditor in both public and private clients, I didn't feel like our extra SOX/controls testing did much extra if a public company were willing to be sleazy or commit fraud. In fact, it was made clear to us during training that our jobs were explicitly not to catch fraud as this level of assurance would open up too much liability to the firm.
Anyways, I digress. Thoughts? (on how my money can touch the private area)
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>>1931154
Total investing noob here so forgiveness prease if me sound like retarted but, I would think whether it's private or public doesn't matter, but what really matters is the underlying assets/company's owned by the holding company compared to the rest of the industry?
How you can find that information I don't know, but there must be tax returns and just general market intelligence reports you can look at to see how they shape up?
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>>1931154
No there's nothing inherently wrong with it if you're not qualified or sufficiently capitalized to invest directly. However, I'd be highly suspicious of both the actual and implicit fee drag that you're paying to access private equity indirectly. That has to be a major drag on your actual performance.
Not to mention, you don't even have minority shareholder protections when you approach PE indirectly. You're entirely at the mercy of your proxy, and you can't even get the information needed to play a role. In my personal experience, it's important for small PE investors to take an active hand in protecting their interests. The big payouts come when the M&A/IPO happens, and as an indirect investor, you don't even have a seat at the table for those negotiations.
>>1931154
>I would think whether it's private or public doesn't matter
Private companies tend to be smaller, more nimble, and often have larger room to grow. They also don't suffer from the same regulatory drag that weighs down public companies.
There's nothing about being private that inherently makes the company better ... but there are lots of advantages.
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>>1931154
how do i buy private companies
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>>1931230
>how do i buy private companies
Step 1. Have a net worth of at least $1,000,000, excluding the value of one's primary residence, or have income at least $200,000 each year for the last two years (or $300,000 combined income if married) and have the expectation to make the same amount this year.
Once you satisfy Step 1, come back and I'll explain the rest.
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>>1931266
>I don't want your money
Said no successful businessman ever.
Nouveau riche like yourself probably think talking down to customers endears you too :^)
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>>1931273
You seem to have me confused with the Securities & Exchange Commission, kid. If you want to cry about the rules, take it up with them.
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>>1931185
>I'd be highly suspicious of both the actual and implicit fee drag that you're paying to access private equity indirectly. That has to be a major drag on your actual performance.
> They also don't suffer from the same regulatory drag that weighs down public companies.
Solid insights!
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