2019 February

Private placement securities are similar to typical stock offerings but to private investors, rather than the public, they allow companies to raise significant capital without having to become a publicly traded company.

Private investment opportunities are typically offered in the early stages of a company’s life when they are trying to grow or acquire key assets. Companies and investors both benefit greatly from the issuing of private placements. Investment companies that use private placements do so by providing opportunities to investors with defined exit and the expectation of an ROI.

Heightened volatility in the equity markets and low bond yields have made investment success challenging for many investors, and the future doesn’t hold much promise in the public markets. A recent report by Deutsche Asset Management’s Quantitative Strategies Group forecasted that the long-term (20 years) forecast for the U.S. equity markets is considerably lower than the historical returns of the 1980s and 1990s.

With these lower return expectations, what is an investor to do with heightened return requirements given inflation and the other economic factors increasing financial demands when they retire?