Private assets are assets held in investments that are not publicly traded. This includes investments with private equity and privately managed equity real estate funds, among others.
According to the Securities and Exchange Commission (SEC), an asset is “any tangible or intangible item that has value in an exchange. A bank account, a home, or shares of stock are all examples of assets.”
Private investments are not publicly traded and there are fewer regulations than with the traditional asset classes, stocks, bonds, and cash. Because of this, assets from private investments are usually considered alternative investments.
A few of the most common private asset investment types are:
Private Equity
Private equity investments are not traded on public markets and are usually pursued by accredited investors or high-net-worth individuals. Private equity firms usually acquire or invest in private companies with the aim to take them public or sell them for a profit. Because assets from private equity investments are not with a public company, it is considered a private asset.
Real Estate
Real estate assets are usually considered private assets. An example of a real estate private asset is investing in a Real Estate Investment Trust (REIT). In a REIT an investor purchases shares in the trust that owns real estate that seeks to produce income.
Infrastructure
Privately managed infrastructure funds are an example of a private asset class. Examples include investments in energy and telecommunications.
Private Credit
Private credit is an alternative asset class where investments are made into non-publicly held debt and direct or private lending companies.
Private assets and investments can be complicated, and it is best to consult with a financial advisor to understand each investment fully.
This material is for general information and educational purposes only. Information is based on data gathered from what we believe are reliable sources. It is not guaranteed as to accuracy, does not purport to be complete and is not intended to be used as a primary basis for investment decisions. Alternative investments, including hedge funds, commodities, and managed futures involve a high degree of risk, often engage in leveraging and other speculative investments practices that may increase risk of investment loss, can be highly illiquid, are not required to provide periodic pricing or valuation information to investors, may involve complex tax structures and delays in distributing important tax information, are subject to the same regulatory requirements as mutual funds, often charge higher fees which may offset any trading profits, and in many cases the underlying investments are not transparent and are known only to the investment manager. The performance of alternative investments can be volatile. There is often no secondary market for an investor's interest in alternative investments and none is expected to develop. There may be restrictions on transferring interests in any alternative investment. Alternative investment products often execute a substantial portion of their trades on non-US exchanges. Investing in foreign markets may entail risks that differ from those associated with investments in the US markets. Additionally, alternative investments often entail commodity trading which can involve substantial risk of loss.
