Ever wondered where the ultra-wealthy park their money to make it grow? For years, private markets have been their playground—exclusive, high-return, and out of reach for most of us. But here’s the kicker: things are changing, and fast. The once-elusive world of private equity and alternative investments is opening its doors, letting everyday investors with a bit of cash get in on the action. I’ve always been fascinated by how the financial world evolves, and this shift feels like a game-changer worth exploring.
Why Private Markets Are the New Frontier
The financial landscape has transformed dramatically over the past few decades. Back in the mid-90s, there were over 7,000 publicly listed companies in the U.S. alone. Fast forward to today, and that number’s dwindled to around 4,300. Companies are either staying private longer or skipping the public market entirely. Why? Going public is expensive, regulatory hurdles are a nightmare, and private markets offer more flexibility. This means the real growth stories—those high-potential companies—are often tucked away in the private sphere.
So, what does this mean for you? If you’re only investing in stocks or ETFs, you’re missing out on a massive chunk of opportunity. Of the 159,000 companies worldwide generating over $100 million in annual revenue, a whopping 140,000 are privately held. That’s a lot of untapped potential! Private markets, encompassing private equity, private credit, and infrastructure, are where the action is. And the best part? They’re becoming more accessible than ever.
The Allure of Private Equity: High Returns, High Stakes
Private equity funds have been around for ages, but their appeal lies in their track record. Over the past 25 years, these funds have outpaced global public equity markets by an average of 7.3% annually. That’s not pocket change—it’s the kind of return that can turn a modest investment into something substantial over time. The catch? These funds buy companies, improve them, and sell them for a profit, often requiring investors to lock up their money for a decade or more.
“Private equity is about finding diamonds in the rough and polishing them to shine.”
– Investment strategist
Historically, only the ultra-wealthy or institutional investors—like pension funds—could afford the multi-million-dollar entry fees. But new structures are shaking things up, making it possible for investors with as little as £25,000 to dip their toes into this high-return pool. I find this democratization of wealth-building incredibly exciting—it’s like the financial equivalent of opening a Michelin-star kitchen to home cooks.
Evergreen Funds: The Game-Changer for Accessibility
So, how exactly are private markets becoming more accessible? Enter evergreen funds. These are like the unit trusts of the private market world—structured to allow regular investments and periodic withdrawals, typically quarterly. Unlike traditional private equity funds, which lock your money away for years, evergreen funds offer flexibility without sacrificing the potential for strong returns.
Imagine this: instead of needing millions, you can start with £25,000 to £50,000. That’s still a significant sum, sure, but it’s a far cry from the exclusive clubs of yesteryear. These funds are designed to give you exposure to private equity, infrastructure, or private credit, all while keeping things manageable. It’s like getting a VIP pass to a concert without needing to own the venue.
- Lower entry barriers: Minimum investments as low as £25,000.
- Flexibility: Quarterly liquidity windows for accessing your money.
- Diversification: Exposure to private companies, infrastructure, and credit.
Three Ways to Dive Into Private Markets
Let’s break down three compelling options for accessing private markets. Each offers a unique angle, catering to different investor preferences and risk tolerances. I’ve always believed that understanding your options is half the battle in smart investing, so let’s explore these in detail.
1. Private Equity and Infrastructure Blend
One option is a fund that combines private equity with infrastructure investments. These funds focus on acquiring promising businesses and essential assets like utilities or transportation networks, aiming to grow them sustainably. Since launching in mid-2023, one such fund has already grown its net assets to over €1 billion and delivered a 20.2% return in sterling. The goal? A steady 12%-15% annual return over the long term, net of fees.
What I love about this approach is its emphasis on sustainability. These funds don’t just chase quick profits; they aim to build lasting value. With a minimum investment of around £26,000, it’s a solid entry point for those looking to diversify beyond stocks and bonds.
2. Secondaries: Buying Smart, Not Hard
Another avenue is secondaries, where funds purchase existing private equity stakes at a discount. This strategy reduces risk because the investments are already a few years into their lifecycle, with more predictable outcomes. One leading secondaries manager, with over 30 years in the game, has delivered an average 16% internal rate of return since 1990. That’s impressive consistency.
“Secondaries are like buying a house that’s already been renovated—you get value without the heavy lifting.”
– Financial analyst
With a minimum investment of £26,000, secondaries offer a less volatile way to tap into private markets. It’s a bit like finding a bargain at a high-end store—same quality, lower price.
3. Private Credit: High Yields, Lower Risk
Finally, there’s private credit, which involves lending directly to companies. This approach, led by firms with expertise in opportunistic credit and direct lending, targets a net distribution yield of 8%-10% and a leveraged return of 9%-11%. The focus here is on managing downside risk, drawing on decades of experience in distressed credit markets.
What’s unique is the lower annual management fee—around 1.8% for certain share classes—making it more cost-effective. With a minimum investment of £51,000, it’s a bit pricier but offers steady income potential. I’ve always thought private credit feels like the unsung hero of alternative investments—less flashy but reliably rewarding.
Weighing the Risks and Rewards
Private markets aren’t a free lunch. They come with risks—illiquidity, higher fees, and the potential for losses if investments don’t pan out. Unlike stocks, you can’t just sell your stake on a whim; you’re often committed for years, even with evergreen funds. But the rewards? They can be substantial, especially for those willing to take a long-term view.
| Investment Type | Target Return | Minimum Investment | Risk Level |
| Private Equity/Infrastructure | 12%-15% | £26,000 | Medium-High |
| Secondaries | 16% IRR | £26,000 | Medium |
| Private Credit | 8%-11% | £51,000 | Medium-Low |
The key is diversification. By spreading your investments across private equity, secondaries, and private credit, you can balance risk and reward. It’s like building a financial wardrobe—mix and match to suit your style and goals.
Why Now Is the Time to Act
The shift toward accessible private markets isn’t just a trend—it’s a structural change. As public markets shrink and private companies dominate growth, sitting on the sidelines could mean missing out. I’ve seen too many investors stick to the same old strategies, only to regret not exploring new opportunities sooner.
Evergreen funds, with their lower entry points and flexibility, are leveling the playing field. Whether you’re drawn to the high-growth potential of private equity, the stability of secondaries, or the steady income from private credit, there’s something for everyone. The question is: are you ready to take the plunge?
“The best time to invest in private markets was a decade ago. The second-best time is now.”
– Wealth advisor
How to Get Started
Diving into private markets might feel daunting, but it’s more straightforward than you think. Here’s a quick roadmap to get you started:
- Assess your finances: Ensure you have enough liquid assets to meet the minimum investment, typically £25,000 to £50,000.
- Research fund options: Look for reputable managers with a strong track record in private equity, secondaries, or private credit.
- Understand the terms: Check liquidity windows, fees, and lock-up periods to align with your goals.
- Consult a professional: A financial advisor can help tailor your portfolio to include private market investments.
- Start small: Dip your toes in with a single fund to test the waters before going all-in.
Perhaps the most exciting part is the potential to diversify your portfolio in ways that weren’t possible a decade ago. Private markets offer a chance to tap into growth that’s off the beaten path, and with evergreen funds, you don’t need to be a billionaire to do it.
Final Thoughts: A New Era of Investing
Private markets are no longer the exclusive domain of the ultra-wealthy. With evergreen funds lowering the barriers to entry, anyone with a bit of capital and a long-term mindset can get in on the action. The potential for higher returns, coupled with the flexibility of these new structures, makes this an exciting time to rethink your investment strategy.
In my experience, the best investors are those who aren’t afraid to explore new opportunities. Private markets might just be the edge you need to supercharge your portfolio. So, what’s holding you back? The door to private markets is open—step through and see where it takes you.
Private Market Success Formula: 50% Research + 30% Diversification + 20% Patience = Long-Term Wealth
