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August 16, 2005
Private Equity hedge funds attractive for smaller investors too!
More and more investors seem to be moving towards private equity funds in search of profits. Hedge funds are welcoming this move by lowering their basic minimum entry level amount to as low as $25,000. This is very different from $1 million or $10 million that was generally being asked for by the funds. More and more retail and investment banks today are partnering with private-equity funds to offer lower minimum investment products to smaller investors. Though the smaller investors are being attracted towards these funds because of this, all is not easy go for them. For one, they have to deal with high risks that come with high returns. High fee structure is another dampener with some funds charging 20% of profits apart from asset management fees. And of course there are lock-in period clauses to deal with. None the less a profit range of 15% to 30% yields on a 10-year fund is an attraction that no one is willing to oversee. Financial-planning.com reports:
“Fees can be high and so can the risks, but this summer sale could make private-equity funds this year's alternative investment of choice for wealthy individuals seeking higher returns, The Wall Street Journal reports.”
Read More: Private Equity Could Be This Year's Hedge Fund
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