Advanced investing

Private markets invest directly in privately held businesses, infrastructure projects, property developments, and private loans.

This can cover a range of sectors, geographies and businesses at various stages from a renewable energy start-up to a large-scale commercial real estate company.

Private assets are usually valued monthly, quarterly or annually, depending on the specific investment. This differs from public market investments where listed investments, like shares are valued daily.

Gains and income an individual receives from private market investments need to be declared according to HMRC rules.

Private equity can bring exposure to companies and opportunities not found in public markets, which can help spread risk and improve the potential for better long-term returns.

It all depends on the make up of your own portfolio. We recommend that high-risk private market investments don’t make up more than 10% of your overall portfolio.

Private assets can help diversify your portfolio, offer access to investments not available in public markets, and potentially increase long-term returns. While they can help reduce overall volatility of a portfolio due to the diversification they may add, private markets investments can be highly volatile so should be considered carefully.

Private markets are illiquid. This means your money could be tied up for several years and it may be difficult to sell. Make sure you are comfortable with investing your money for long periods (5 years minimum) before participating.

Investment is usually made via specialist funds, partnerships, or vehicles run by asset managers. Some listed funds or platforms offer wider access but most private market investments are only available to sophisticated or high-net-worth investors, and you’ll need to pass certain checks and requirements.

Changes in regulations have made it easier for investors to access private assets. New regulatory fund structures, such as the European Long-Term Investment Fund (ELTIF) and the UK’s Long-Term Asset Fund (LTAF), are increasing access to private assets for private clients in certain markets.

Risks include liquidity, financial loss, operational or market risks. Investors should consider spreading investments and committing only what they can afford for the long term.

Additionally, private debt investments often involve complex structures and may lack transparency compared to public market investments. Investors should carefully evaluate the track record and strategy of the investment manager, as the performance of private debt heavily depends on the manager’s expertise.