Tips on how to boost your private capital portfolio
An important step in building your profile is to determine how much capital you have. From there you can then decide which style of application you want to build your portfolio. There are three forms of private capital investing, investing in funds arranged by independent capital managers, investment in commingled portfolio, or fund of multiple private capital managers. Each of these have their good and bad sides. Investors must contemplate all factors in deciding how to build their capital profile. The main thing to keep in mind is that you must be able to fund your investment and properly staff it.
Direct investment is a very effective option. One upside to this is that it does not require an investment manager. An investment manager can be pricey and sometimes unreliable. This way the investor directly commits capital to an independent company or estate. The small downside is that the investor then becomes at least a part owner. An example of this is a large institution called Audentia Capital Management. They can invest as either stand alone investors or co-investors. This way you can avoid all management fees. Although with no fees or manager the responsibility of the investor is drastically increased. Sourcing and evaluating the investment, and building and managing the profile must all be done by the investor. The investor will also be in charge of disposing of the investments at deadlines and for a fair price. The investor does have the option to hire a specialized staff to do that for them. If one does not have considerable funds and management resources direct investment can be risky. But with the right resources it may be the most effective investment.
Another way is investment through private capital managers. This must be done in direct relationship or it cannot be as effective. In this option it is as if you and your investor are partners. The investor will commit capital to a fund organized by private equity. The life of these funds is typically ten or eleven years. It might be a good idea to open another account or two as time goes on. A very common problem you will run into is finding the right partner/manager for you. Everyone has different requirements and skills needed. It can take years of networking and relationships to find the right manager. Companies like Audentia can help you sort through these options and give you tips. The main upside to this investment is that you only have to pay fees to your managers. For a business with a good staff and some inside connections to high profile managers access this can be very effective.