The Truth Revealed: The perception that private equity is inherently riskier than public equities doesn’t always match up with reality

What you should know

• If you invested $1.00 in the stock market in 2018, it would be worth $1.23 in January 2023, while $1.00 invested in private equity over the same time frame would be worth $2.24.¹
• When considering private market opportunities, investors can tailor their strategies to include small cap growth, large cap value and everything in between.
• In 2022, the U.S. Securities and Exchange Commission recommended expanding high-net-worth (HNW) investor access to private investments, citing how private markets often outperform public markets while adding considerable diversification to investors’ portfolios.²

Introduction

Once considered speculative, private markets continue to evolve, especially as the structural hurdles for ultra-high-net-worth (UHNW) investors have come down. Still, no matter the level of expertise or the market environment, investors and advisors who understand this segment of the market are well positioned to make informed and comprehensive decisions about their portfolios.

This Truth Revealed series explores private market investing with three objectives in mind:

• To dispel some of the incorrect notions about private markets 
• To help investors and advisors better understand private markets’ potential to outperform public markets 
• To assist investors and advisors as they consider how private markets investing may align with their investment objectives

1 Hamilton Lane Data via Cobalt, Bloomberg (August 2022)
2 SEC Proposes to Enhance Private Fund Investor Protection, U.S. Securities and Exchange Commission, 2022

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