Private equity is a trend that investors cannot ignore

Over the past 20 years, private markets have turned out to be among the best investment options

Individual investors are now welcome to attend the celebration.

According to Preqin, the amount of private equity assets under management is predicted to almost double, from £5.8 trillion in 2023 to £12 trillion by 2029, making the industry one of the fastest-growing asset classes globally.

Over half of private market investments are in private equity, but as investors look to take advantage of the possible returns, real assets and private credit/debt are also expanding quickly.

This market has historically been closed to the average investor. That is now beginning to change.

Equity in private.

Several investment behemoths control the private equity market, raising capital from institutional investors to finance transactions through massive pooled funds. For example, in 2024, EQT, the biggest private equity investor in Europe and the third largest globally, closed the largest private equity fund at £22.6 billion for its flagship fund, which primarily invests in healthcare technology in North America and Europe.

The goal of private equity investors is to purchase companies, either directly from other investors or by taking them private through a takeover on an exchange like the London Stock Exchange.

Take-private transactions in Europe have topped £1 trillion in the last ten years. In order to take advantage of low valuations, buyout firms spent 63 billion dollars last year on British companies.

Private equity owners look to add value to a company they have purchased by bringing in new managers, increasing efficiency, and promoting strategic growth by entering new markets. Additionally, they can combine the companies with other organizations to attain economies of scale.

Wealthy investors are typically the only ones with access to private market funds, with minimum investments ranging from £5 million to £10 million. Additionally, funds frequently require lockups for five to ten years or longer.

Ordinary investors have been excluded from the potential profits due to these requirements. £10,000 invested in a hypothetical basket of private equity funds in 1999 might be worth £200,000 today, while an equivalent basket of public equity funds would only be worth less than £40,000. One cannot predict the future based on past performance.

Opening up.

Semi-liquid, or evergreen, private market funds have become more and more popular, which has contributed to market democratization. With some exceptions, they are structured similarly to unit trusts and enable investors to make regular investments. Capital is quickly distributed throughout a diverse private equity portfolio. Importantly, semi-liquid funds are made to provide investors with periodic liquidity, allowing you to request withdrawals on a rolling basis, usually every quarter.

Now, qualified investors may be able to access top semi-liquid private market funds for as little as £10,000. This change has resulted in a significant uptake on the other side of the Atlantic, where they have raised more than £380 billion from "everyday millionaires" who want to diversify their holdings beyond conventional stocks and bonds.

Evergreen versions of their sizable institutional funds have been introduced by numerous prominent private equity investors. The Nexus platform, for example, was developed by EQT especially for private investors. Together, Brookfield and Oaktree, two of the top providers of private credit and alternative assets, respectively, established Brookfield Oaktree Wealth Solutions to provide private investors with institutional-level alternative expertise. In the meantime, BlackRock is attempting to do the same for private assets after becoming the largest asset manager in the world by simplifying access to stocks and bonds.

Wealth Club has created a unique platform that enables qualified UK investors to access some of the top private equity and private markets fund managers globally, enabling investors to take part.

Wealth Club.

Download your free guide to find out more.

Wealth Club has created a thorough free guide called Investing in Private Equity and Private Markets for seasoned investors who are interested in learning more about the private equity industry and how they might now be able to access this asset class. This manual describes private markets and private equity, their operation, possible advantages, andmost importantlythe risks. It also explains how qualified investors might be able to invest as little as £10,000. It is available for download here.

Investments in private markets are illiquid and fraught with danger. Your capital could be lost. The only people who can invest are those with high net worths or sophisticated investing skills. A non-advisory service called Wealth Club Ltd. issued the promotion.

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