1. Private equity has proven to provide far better returns than stocks and bonds.
Private equity has had average annual returns of 10.64% over the past 10 years.1
And more specifically, private “growth” equity (the area of investing we focus on at InvestX), which is an investment in a late-stage private company, had an average annual return of 11.67% over the past 10 years.1
2. Private Equity provides improved portfolio diversification, which decreases market risk.
Private equity investments are usually much less correlated to the market. Investors who watch the market know that it bounces up and down all of the time.
This can be extremely stressful and often causes investors to make emotional decisions and sell at the wrong time. Having a diversified portfolio will smooth out those bumps. You don’t lose money every time the market goes down.
Unfortunately, only 1% of the investing population has had direct access to private equity – institutional investors (e.g., pension funds) and the ultra high net-worth individuals.
Who makes up this minute 1%? Below is a breakdown of the main sources of private equity money in Canada: 2
90% say that their Private Equity exceeded their expectations
92% say that they believe Private Equity investments will outperform the public markets
98% say they plan to maintain or increase the amount of money they have in Private Equity
For two reasons:
For the first time, InvestX Financial Canada provides accredited investors with access to institutional-quality private equity deals.