Our clients have access to attractive direct investment opportunities structured to meet their needs and investment goals.
We use our extensive experience in private investing to source opportunities through our proprietary Cresset ecosystem. We find sophisticated investment opportunities in private companies and in real estate, and we have pioneered new product designs to provide our clients with strategic and efficient access to the private marketplace. This provides our clients with the opportunity to achieve their desired rates of return, greater diversification, and to precisely address their unique goals.
Why Private Investments?
Institutions and ultra-wealthy investors have long invested in private markets as a complement to their public market exposure, as growth and returns in the private market have outpaced those in the public.
Private market equity investments have outperformed public stock markets
The drivers of opportunity in the private markets remain strong:
- Over the last two decades, the opportunity set in the public market has narrowed significantly: the number of U.S. listed stocks dropped from 8,090 in 1995 to 4,331 in 2016, while private market opportunities remain plentiful and number in the thousands.
- Companies tend to go public later in their lifespans—if at all. The dearth of IPOs has reduced the number of investment opportunities in the public market and, consequently, shifted them to the private market.
- Private companies’ valuations are often more attractive than those of comparable public companies. On average, private company transactions are valued at EBITDA multiples approximately 2x lower than public comparables.
- Private real estate investments are a significant global wealth driver. A majority of worldwide wealth is derived, in some form, from long-term, private real estate.
The Problem of Access
Most individual investors have not had the opportunity to consider these investments for their portfolios, as the investment vehicles for private investments—typically built with institutions and ultra-wealthy investors in mind – have made them almost impossible for individuals to access:
- High minimum initial investment, often of $1,000,000 or more, makes it difficult to build diversified exposure that is sized appropriately for any but the largest portfolios.
- A multi-year period of negative cash flows, the so-called “J-Curve” of private investing, where investors typically provide capital over the initial years of an investment and don’t start to see positive returns on that cash for several years.
- Typically, multi-year delays occur from upfront investment to distributions to investors.
- The nature of private investing is such that it requires deep research expertise and an extensive network for sourcing deals, typically not readily available to the individual investor.
Cresset’s Advantage in Private Investing
At Cresset, we believe private investments have been and will continue to be a critical driver of wealth creation, so we have leveraged decades of experience in private investing to create sophisticated ways to bring our clients access to institutional-quality private market opportunities.
Our Co-Founders have been among the leaders in the field of private equity over the past 30-plus years. Our private markets investment leadership have all had decades-long careers with top-rated organizations and have amassed extensive track records and networks.
We are focused on offering our clients access to high-quality, oftentimes exclusive, opportunities in the private marketplace. We are evolving how our clients can gain access to them so it is truly optimized for the individual.
- Low minimum investment sizes reduce barriers to entry and allow exposure to private investments to be properly sized within an investor’s overall portfolio and to be diversified across a number of individual investments.
- Our clients’ capital is invested upfront so cash flows are captured earlier, overcoming the “J-Curve” of negative cash flows.
- Typically, Cresset structures private investments so they make annual, semi-annual or quarterly distributions to investors right from the outset.
- Cresset can provide access to unique opportunities, using our expansive network to source investments that become exclusive to us.
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