By Ginger Szala, Think Advisor
A dollar of investment in publicly traded stocks in 2018 is worth on average $1.53 today, while a dollar invested in private equity at that time is worth $2.36, according to asset management group Hamilton Lane.
In a recent presentation, the group laid out its pitch for financial advisors to take a look at making client investments in private equity. High investment minimums and distribution restrictions can keep private equity markets out of reach to retail investors. But public access looks to be broadening.
In 2020, the Labor Department gave a green light to private equity investments in 401(k) plans within diversified investment options like target date funds.
In September 2021, the Securities and Exchange Commission’s Asset Management Advisory Committee recommended expanding retail investor access to private investments. The committee’s report showed that private equity, private debt and private real estate investments often outperformed public investments and added diversification to a portfolio.
Meanwhile, private equity funds are eyeing up the high-net-worth retail investor market — a pool of money far larger than pension funds, as Hamilton Lane notes.
Here are eight reasons why private equity, and private markets, deserve advisors’ attention, as presented by Hamilton Lane’s Drew Schardt, head of global investment strategy, and Steve Brennan, managing director and member of the investment committee, in a recent webinar.