5 Things to Know Before You Invest in Private Equity

Consider the “vintage year”

Private equity funds are often categorized by “vintage year” or the year in which they were raised. Funds raised in a certain year may offer the benefit of riding the market cycle and sell when valuations are high and investing when valuations are low.

The fund returns can also vary a lot depending on the vintage year of a fund. Since it can be difficult to predict the market trends, you should diversify by manager type as well as the vintage year when allocating to private equity.

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