Private equity, an opportunity for small investors?

3Settimana

@SchlaubiSchlumpf
I find it amazing what the companies have been able to implement in recent years. I'll keep an eye on everything and probably decide in favor of one of the companies. I like the idea of investing in other levels with high returns.
And one or two dividends don't hurt either, in some of the worse years they were over 6% $BX

I heard about "Nao" through my post and Instagram, where you can invest €1000 in PE.
But I'll have to take a look first, I can well imagine the risks and high costs.

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Uwe@SchlaubiSchlumpf

3Settimana

@Therapeut The former sounds attractive to me too, of course. If I were you, I would also try to find a few expert opinions. Sometimes there are non-systematic reasons for past over-returns, which are not necessarily repeated.

As far as I know, the reporting obligations are more lax in PE than in AGs. This makes it more difficult to distinguish good from bad. This increases the risk and would be a reason for me as an investor to demand excess returns. Or would be a good reason for an excess return. But as always, risk does not mean that returns will increase. On the contrary, returns are often based on risks. Which doesn't mean that it can't be worth taking them.
That would be interesting for me too. Although I'm already very wildly invested (with a strategy) and am unsure whether I want to complicate my portfolio further 😂

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Tenbagger2024@Tenbagger2024

3Settimana

@SchlaubiSchlumpf
I have also read about the opacity of the key figures. In some cases, only the money invested is stated in the return figures; the money that could not be invested is not included.

Yes, I understand that. I also try to invest in an uncomplicated way but with my own taste.
Unfortunately, I then spend several hours, even passively in my head, making my decisions😂

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Uwe@SchlaubiSchlumpf

3Settimana

@Therapeut you're allowed to do that 😁 it's often about money that you work for months or even years.
I think in PE they also like to talk about factors. I haven't quite figured it out yet, but it sounds a bit like ignoring compound interest.

I think if you are well informed, you can also do PE. Above all, it's important not to just follow some advisor with advertising brochures, ask yourself why this advisor is taking so much time for you and how he or she knows that this investment is good, while the broad market doesn't know this.

And without an advisor, you always have to ask yourself why you expect an excess return. Something must always be going better than many others think.

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3Settimana

Thanks for the article. I think private equity will become even more attractive as interest rates fall. Take a look at $APO or $III

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Ukitetfinvestor@Ukitetfinvestor

3Settimana

@Tenbagger2024 thanks I'll take a look too👍

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2Settimana

There is good opportunity to look UK based Private Equity Investment Trusts to directly invest in companies managing PE Investment, many currently trade at a discount to NAV so a good opportunity to play a decrease in discount. This gives an overview, https://www.trustintelligence.co.uk/investor/articles/guides-investing-in-private-equity-with-investment-trusts-may-2024

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3Settimana

Next time post at noon instead. You'll only kill the post at this time. It will disappear until noon tomorrow among all the what should I buy posts.

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3Settimana

@topicswithhead 😂 yes I thought so too, but my last one was deleted as a draft after closing the app...

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3Settimana

@topicswithhead otherwise Brookfield is mega interesting. PE itself is becoming more and more important, but you have to be careful not to put your foot in your mouth. The problem with the industry is that they have eaten so much and now need to liquidate. The only thing is that nobody wants to pay the prices and in my opinion the problem won't go away, because scrap IPO after scrap IPO only leads to even more discounts. You would simply have to accept giving investors a small discount in order to be able to list even more on the stock exchanges. Unfortunately, none of the PE companies think about asking for "less" money

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3Settimana

@topicswithhead But the reality is that with the growth rates they have, you have to think about having PE too, because if more remains private for longer, you miss out on more and more of the market in the long term. This also applies to private credit or infrastructure, which is increasingly no longer being financed by the public sector, but now also from behind the scenes.

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3Settimana

@topicswithhead extremely, how they have performed over the last 5 years... do you have any in your portfolio? I'm extremely undecided about that. Brookfield thinks it will double in 5 years... KRR and Blackstone are supposed to be similar.

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3Settimana

@Therapeut none, but I was thinking about investing in Brookfield. They are the most attractive construct for me. They have massive insider participation, a lot of it is publicly tradable, which means you have insight into the NAV or investments and although I don't understand from the figures why they have such a good share price, they have it and they have always stuck to their targets so far. $BN

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3Settimana

@topicswithhead although I just remembered mutares lul. But there are also other interesting concepts, such as $APO.

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3Settimana

@topicswithhead If you think about it, maybe not a PE in the direct sense, but through Prosus and Exor I have a lot more PE in there than I thought, so I have a bit of something. The Economist, neuralink and co are in the venture funds at Exor.

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3Settimana

Supposedly you can invest private equity like even with small amounts via the NAO app. But I have no idea how that works, I haven't tried it yet. Just seen it once

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3Settimana

@ETF_Jesus I'll take a look. You can start there from 1k.
I can imagine that the fees will be relatively high.

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3Settimana

@Therapeut I guess so, I made an account there a few days ago, but not yet KYC. Let's see, report back when you know more

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3Settimana

@ETF_Jesus Here you have a video about it:

https://youtu.be/Lwedb16sz8U?si=C8HJrRZzX-XYISFI

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3Settimana

@Therapeut merci

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3Settimana

@ETF_Jesus relatively expensive for the high risk (PE fund has 3% ongoing fees p.a.), so I prefer to stick with equities

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Sauerland_Investor@LeckerBierchen

3Settimana

@Therapeut You have a point there, yes

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3Settimana

@Therapeut I've been invested there with a small amount since December. The costs are high, but if I get 14% p.a. after costs after 10 years, as advertised, I shouldn't care. Let's see what happens.

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Saschko@WarrenamBuffet

3Settimana

Interesting sector, I am a fan of individual stocks rather than ETFs

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Mister_ultra@Mister_ultra

3Settimana

@WarrenamBuffet I agree 0.7 would be too expensive for me
Which share would you choose?

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Saschko@WarrenamBuffet

3Settimana

@Therapeut I have $BX $III and $MUX in the depot

$BX is really expensive at the moment, bought them in the 2022 crash and has been very worthwhile so far :)

I actually don't find the other 2 too ''expensive'' yet

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Saschko@WarrenamBuffet

3Settimana

@Therapeut Yes, it is expensive, but if there were a long-term outperformance, it would be negligible. Over 10 years it is ahead of a world. Not over 20....

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3Settimana

Thanks for the insight! I have also been considering adding Blackstone or KKR to my portfolio for some time.

Nevertheless, this is always only an indirect investment. After all, I'm not a drug dealer with Canopy Growth, I'm still just an investor in a company.

I'm curious to see how the private equity market for retail investors will develop, for example via ELTIFs and offerings such as LIQID NXT.
However, I want to see a track record there first before I get involved.

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Mister_ultra@Mister_ultra

3Settimana

@Mister_ultra with the NAO App you can invest from 1000€ in PE funds, costs 3% per year... and spongy returns...
I'll wait and see, but I can imagine getting in at $BN

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3Settimana

@Therapeut NAO is also still available and at €1,000 is of course less bad than LIQID NXT with €10,000 + savings plan.

But NAO also has to deliver for me first.

I also don't have the feeling that the good opportunities are really still arriving "at the bottom" for small investors. To me, it looks more like a leftover ramp.

With Blackstone or KKR, you at least benefit, even if only indirectly.

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TaxesAreTheft@TaxesAreTheft

3Settimana

I am invested in $BN and $BAM

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Investor@Investorentagebuch

1Settimana

Bear in mind that by buying shares in KKR, Blackstone and the like, you are not really investing in "private equity" but merely in the listed management vehicle of now asset managers, some of which originally started out as traditional PE firms (but have not been since the early 2000s). By investing in the management vehicle, you mainly benefit from the management fee, but little or nothing from the success of the individual investments... as they are "private", in closed funds with a term of usually 10 years. You can usually invest from 100k via feeder vehicles. In the meantime, there are some attempts to make the whole thing more accessible to retail investors via Eltifs, although I am personally a little cautious here. In terms of structure, it is simply difficult to make unlisted investments suitable for the stock market.

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1Settimana

Thank you for your message, unfortunately what you say is true. As a small investor, there aren't many options. Recently you can invest in a PE fund via an app, the plan is 14% p.a., but yes, it has relatively high fees.

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