By J.P. Dahdah, Founder & CEO of Vantage
Did you know that in the second quarter of 2013, private equity investments on the United States were valued at $71 billion? That is a lot of money, and a lot of it actually comes from investors just like you. In fact, private equity investments are some of the best ways to generate a passive income on your Self-Directed Individual Retirement Account.
What are private equity investments?
Simply put, private equity investments are usually investments in companies that are not publicly traded. These investments usually give smaller companies the chance to work towards expansion, develop new products and restructure the company when necessary.
Most people think only independently wealthy individuals can invest in private companies, but many of these so-called “angel investors” are actually people just like you. Like any good investor, you’re going to want to know what the return on investment is for private equity investments. This is a very difficult number to determine. Because there are so many different kinds of private equity investments, it’s hard to compare them and gather data. However, there was a study in 2005 that suggested that the rate of return was comparable to the rates of return on publicly traded investments.
If you want to know more about private equity investments, there are a few organizations that give free, impartial information. Check out these websites:
- Harvard Business School offers information on how to gather information on possible investments.
- The Private Equity Growth Capital Council has a great website with a lot of information to help you understand the ins and outs of private equity investing.
- The Tuck School of Business at Dartmouth has a page dedicated to research and information that can be very helpful.
What do you want to know when it comes to private equity investing? Ask your questions in the comments!