A primer on private markets

28 October 2024 by National Bank Investments

Historically, private investments were reserved for institutional investors such as pension funds. In recent years, however, retail investors can participate in private equity, private credit, real estate and infrastructure opportunities, often with lower minimum investment thresholds and greater transparency, making private investments more accessible than ever before.

National Bank Investments, in collaboration with HarbourVest, takes a look at the different aspects of today’s private investments and how this paradigm shift has been made possible by the emergence of innovative financial products and the democratization of investment platforms. Our most recent white paper breaks down how.

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The democratization of private investments

As private markets have evolved, they have become a valuable component of investment strategies, both for institutional and individual portfolios. These markets now offer unique opportunities to strengthen and diversify investments, making them an essential element in modern portfolio management.

Sizing the opportunity

As regulation evolves and new product innovations are launched, the door to private markets is wide open. Structural barriers such as longer-term capital lock up periods that limit liquidity and the complexities and time required to create a private markets portfolio are being removed. More investors can now tap into the potential outperformance and diversification benefits offered by private markets. This is shown by:

The ability to invest in a broader universe comprised of many companies which are at earlier stages of growth presents an opportunity for enhanced returns.
The potential for greater portfolio diversification since they are typically less correlated with traditional stock and bond markets, helping to reduce overall risk.

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Legal notes

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