Private equity is becoming easier for individual investors to access. But why are asset managers increasingly looking towards private wealth, and what should investors understand before investing?
Private equity has historically outperformed public markets, but leverage, return measures, manager selection, fees and illiquidity complicate the comparison.
Private equity can offer access to different businesses and sources of return, but less frequent pricing, leverage, illiquidity and complex return measures can make its risks less visible.
Unit trusts can offer diversification and professional management, but investors still need to understand what they own, how distributions are generated and the role each fund plays in a portfolio.