Should You Add Private Investments to Your Portfolio?

By Dan Routh, Partner

Most investors build their portfolios with public funds of stocks, bonds, and REITs (real estate). They're easy to access, relatively transparent, and can be sold on any trading day. But as your portfolio grows, you may start hearing about private investments – real estate funds, private equity, venture capital, private credit, angel investing, the list goes on.

It leaves you wondering...

Am I missing out?

Let’s break down what private investing actually is, how it works, and how to know if it’s a fit.

What Counts as a Private Investment?

Private investments don’t trade on public markets. There are many types, but the most common are:

Private equity – ownership in established, non-public companies
Venture capital – early-stage startup investing
Private credit – lending to companies outside the traditional banking system
Private real estate – funds or syndications that own property directly

Because they’re not listed on exchanges, these investments are less liquid, less regulated, and typically available only to investors who meet minimum net worth or income hurdles.

Why Do Investors Consider Them?

You don’t need private investments to build a successful portfolio or financial plan. But for some investors, they can add value:

Diversification – private assets often behave differently than public markets
Return potential – some private markets have historically outperformed public ones
Access – certain opportunities (like direct real estate or growth-stage companies) aren’t available in public markets

That said, they come with meaningful tradeoffs: less liquidity, higher fees, and a wide range in quality. Manager selection and deal structure matter - a lot.

How Most Investors Get Involved

Private investing often starts informally. A friend pitches a startup. A colleague is raising money for a real estate project. These deals can feel exclusive and exciting, but they’re usually high risk, hard to evaluate, and concentrated in a single investment.

More recently, large asset managers have begun offering private funds to individual investors – sometimes marketed as must-haves for high-net-worth portfolios. The sales pitch is compelling, but it often glosses over complexity, cost, and illiquidity. Recent headlines reflect both the growing interest, and growing skepticism in this part of the market.

How We Think About It

At Old Peak, we approach private investments carefully. We don’t chase trends or one-off deals. When we include private assets in a client’s plan, it’s because they:

Have long-term capital they don’t need for 10+ years
Already have a strong, diversified public market portfolio
Are looking to complement, not replace, their core investments

Just as we do for public market managers – we focus on institutional-quality investments, diversified across asset types, and make sure they align with the client’s broader goals, risk tolerance, and liquidity needs.

A Tool, Not a Requirement

Private investments can play a role in a well-constructed portfolio, but they’re not essential. They’re simply one tool among many, and one that requires patience, discipline, and a clear understanding of the risks involved.

The key is to treat them with the same care and planning as the rest of your investments and financial plan.