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Private Equity
Private equity is a broad category that refers to capital investment made into private companies , or those not listed on a public exchange .
There are several subsets of private equity , including :
• Venture capital , which focuses on startup and early-stage ventures
• Growth capital , which helps more mature companies expand or restructure
• Buyouts , when a company or one of its divisions is purchased outright
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Hedge Funds
Hedge funds are investment funds that trade relatively liquid assets and employ various investing strategies with the goal of earning a high return on their investment . Hedge funds are exclusive , available only to institutional investors , such as endowments , pension funds , and mutual funds , and high-net-worth individuals .
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Tangible Assets
Tangible assets are physical investments . These can include gold , real estate , natural resources , and more . Tangible assets are highly sought after because they are able to avoid the negative effects of market fluctuations , unlike other investment types . Tangible assets are one of the best alternative investments because they are accessible to investors of all experience levels .
Getting Started If you are interested in alternative investments you should carefully consider the pros and cons . These investment types are often not as straightforward as other assets and therefore require more research before getting started . Investing legend Warren Buffet says that true risk comes from not knowing what you ’ re doing and to “ Never invest in a business you cannot understand .”
“ Alternatives are a great way to protect and build your wealth .”
For many alternative investments , there are financial advisors or fund managers prepared to do the heavy lifting . Do not let the idea of a learning curve intimidate you from choosing a profitable alternative investment . Instead , research opportunities to get a better understanding of the required level of involvement .
While professionals might be able to guide you along the process , it is up to the individual investor to determine their own investment goals . Graham Barratt , Director of Currencies Direct advises that , “ As an investor , you need to know what you want to do , what you want to achieve , then contact the professionals .”
Bheki Mkhize , CEO FNB Wealth and Investments adds : “ Defining your ideal goal-set starts with you . It could mean different things for different people , but ultimately it boils down to your needs , wants and responsibilities . This will ultimately determine your goal or objective . Long term investment goals must allow those investors to ride out any short-term volatility and allow your returns to beat inflation .”
Investors may notice that some alternative investments have high upfront fees ; however , it is important to understand that they can also result in
SA Real Estate Investor Magazine FEBRUARY 2021 17