Why Are Alternative Investments Considered Safer Than Public Stocks?

November 4, 2022

Table of Contents

5 reasons alternative investments are safer than public stocks

o   Transparency: A good Private Equity management team is tasked with reporting to partners regularly (monthly or quarterly) and generally available to the partner via cell phone to answer any questions that arise.  

o   Deeper due diligence: Private Equity platforms are “long term” slow money investments that can take years to research and execute to their fullest.  Average execution time for a Custom Private Equity platform is 5-7 years. Slow Money means that the program can take years to develop (ie: commercial real estate is not built overnight), but the end result of the efforts are worth the wait.

o   Greater Dedication by Management: If you invest with a private equity platform, your management team is highly dedicated  to the success of the effort. They generally have a direct financial interest in the success of the venture.  The private equity manager generally has a team member on site, executing the daily activities of the program in person, paying attention to details and supervising the work of contractors to execute the business plan.

o   Partners have direct ownership in the assets of the Platform: If you are a common stockholder in a public company, you have no claim on the assets of the company. If you are a financial partner in a private equity platform (managed by our team) you will have a secure interest in the assets of the portfolio.

o   Risk Management Is Generally More Robust: An experienced management team will develop strategies to manage the risks associated with private platforms. These techniques generally take the form of natural or artificial hedges against a total loss.

If you would like to know more about Custom Private Equity and our research, please call or text (325) 695-1329 or contact us here and we will arrange a discussion.

Related Articles