How small investors can get involved in the private equity market

2023-07-18 04:32:19

Skyline von Frankfurt

Attractive returns on the private equity market – but also high risks.

(Photo: dpa)

Frankfurt Until now, private investors have hardly been able to invest in high-yield asset classes such as private equity. Double-digit returns can sometimes be achieved there. In order to satisfy the growing interest in such alternative investments, some providers are lowering the entry barriers for this market. There are now special financial products with low minimum investment amounts and structures that offer a certain degree of liquidity.

In the private equity market, financial investors such as Blackstone, KKR or Apollo usually buy unlisted companies in order to sell them on at a profit after three to five years. These are often deals with a volume in the millions or even billions. Some of the financial investors also give the companies loans – similar to banks. The money that the private equity funds work with comes from large investors such as pension funds, which can provide capital commitments for the funds of many millions of euros and have no problem with not being able to access this money for a long time.

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