Now Reading: Private market funds: what HNIs should know before investing
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Private market funds: what HNIs should know before investing
A Julius Baer report urges high-net-worth individuals to evaluate private market investments through risk, return and time. Illiquidity, often seen as a risk, is actually a feature that allows fund managers to…
The Story in Brief
A Julius Baer report urges high-net-worth individuals to evaluate private market investments through risk, return and time. Illiquidity, often seen as a risk, is actually a feature that allows fund managers to improve assets before selling. Capital is deployed gradually and returned over three to five years on average, not the full 10-year fund life. Diversification across managers, strategies and vintage years helps reduce liquidity risk. Exit timing depends heavily on market conditions, so investors must set realistic cash flow expectations.
The Indian Opinion
The common narrative that private markets are a shortcut to quick riches ignores the long haul. Illiquidity is not a flaw but the mechanism that enables value creation. Investors who treat private funds like public equities will be disappointed. The real test is whether you can stomach a five-year wait for returns without panic. Before committing, ask your fund manager for the average time to liquidity, if they cannot give a clear number, keep your money in listed assets.
Source: businesstoday.in
This story was synthesised by AI from the source linked above.
