When describing Individual Stocks & Bonds we indicated that if a company wants to raise capital they are able to do this
by accessing the publicly traded stock market, with that said not all companies that wish to raise capital want to incur
the costs, filing requirements, loss of control and the related regulatory obligations involved with becoming a public
company so, alternatively, they remain as “private companies” and raise capital through the Private Equity marketplace.
This marketplace allows an investor to be much more “sector” driven (ie, we get to choose the industry we want to
invest in) so, given our lifelong appreciation of real estate as an investable asset, we use the Private Equity marketplace
to access what we believe are excellent real estate investment opportunities which, in our opinion, allows the investor
much better protection and preservation of their capital. This marketplace allows us to target our preferred real estate
investment, which is multi unit residential real estate, structured toward the $1,000 to $2,000 monthly residential rent, in the southern Ontario marketplace within a 1-2 hour radius of Toronto. In our opinion, this is a very good marketplace to achieve decent annual rates of return in the range of 8-15% while having much better protection and preservation of capital. Another benefit to this marketplace is the ability to build strong relationships with the owners and management of the private equity companies which allows us to develop an in depth understanding of the companies that our clients invest in (this type of relationship building is not possible in the either the Stock & Bonds and/or Mutual Fund
marketplaces). One downside to the Private Equity marketplace is the investment restrictions established by the Ontario Securities Commission which severally restrict the amount of money an investor can invest into any one private
company. So while you may want to invest a certain amount of money into a private equity investment, the OSC guidelines provides restrictions into how much you can actually invest. For those investors that share our opinion about the benefits of real estate investments, the private equity marketplace is a great place to find solid investments.
Advantages of Private Equity no direct exposure to global stock markets; sector concentration.
Disadvantages of Private Equity only periodic valuations; certain liquidity risks.