What Makes A Good Leveraged Buyout?
December 15, 2021
Returns on Private Equity vs. Other High Return Investments
January 14, 2022Every day we talk with busy investors across a wide range of professions. Doctors, Surgeons, Executives, Entrepreneurs and other professionals all have one thing in common… they don’t have the time to focus on investment research and management.
What they do have in common is a desire to invest their money to grow their wealth.
The easiest way to do this is through strategic passive investing.
In this article we describe 5 benefits of passive investing using a private equity firm.
5 Perks of Passive Investing with a PE Firm
Anyone can attempt to invest on their own, but the amount of time it takes to research, execute, manage and optimize your portfolio is extremely high and unfortunately you don’t have that kind of time. So the best option is to work with a PE firm that focuses on passive investments.
- Cash Infusion
Of course you have cash to invest, but if you had even more it could be leveraged to generate even higher returns through more lucrative assets. What’s great about investing with a P.E. firm is that your money is combined with other investors' funds, allowing you access to larger deals that have greater rates of return. Private Equity groups have the resources to fuel better growth financially. Additionally P.E. firms invest their own capital into these deals to show their confidence in each investment. - Expertise
You’ve spent years becoming really good at what you do so you understand the value of expertise. This is why it makes sense to leave the investing to a firm that has also spent years and decades mastering the practice of maximizing profits for its investors. This enables you to invest while you excel in your industry, while we excel in ours, and together we can both profit at the same time.
- Connections
PE firms make it a point to stay connected with potential partners, deal makers and other investors to stay on top of opportunities, emerging trends or upcoming deals. Firms will host events to bring these people together to develop strong relationships with these constituents which allows them to gain access to information quicker and more exclusively, leading to better deals and bigger returns.
- Proven returns
The goal of a firm is to create value and deliver high returns for investors. So an obvious benefit of working with a firm is that you can expect higher returns than if you were to invest yourself or follow some type of speculative advice. One study from Boston Consulting Group found that two-thirds of private equity deals resulted in at least 20 percent annual growth, with nearly half seeing 50 percent annual profits or better. Private equity has been able to outperform stocks by 4 percent over the last 20 years.
- Commitment to success
The great thing about a private equity firm is that they only succeed if you succeed, so there lies a clear correlation between the commitment of a firm and their effort in generating the highest return possible for investors.
If you are looking for a smart and effective way to passively invest and grow your wealth then we would love to talk more with you about that strategy.
