EXPERTM46

Alternative Investments: Private Equity and Real Assets

Understand the role, risk, and due diligence required for private equity, private credit, and other alternative investments.

Learning Goals

Learn the characteristics of private equity, private credit, and real asset investments.
Understand due diligence and liquidity implications.
Evaluate when alternatives add value to a portfolio.

Private Equity

Beginner

Private equity investors buy stakes in unlisted companies with the expectation of improving operations and exiting at a higher valuation.

Private Credit

Beginner

Private credit lends to companies outside bank financing, often earning higher yields with lower public market correlation.

Illiquidity Premium

Beginner

Alternative investments often compensate investors for accepting lower liquidity with a premium expected return.

Indian private equity and private credit have grown rapidly, especially in sectors like technology, healthcare, and infrastructure.

Future Value Calculator

Principal

Annual Return (%)

Years

Future Value₹3,10,585

Gain: ₹2,10,585

🧠 FOOL’S GOLD: The glamour of private deals can blind investors to high fees, long lock-ins, and selection risk.

Alternative Investments: Private Equity and Real Assets

Well-chosen private equity investments in Indian fintech startups rewarded patient backers, but many illiquid deals remained underwater.

Module Quiz

Private equity typically offers:

Private credit always has lower risk than bank loans.

The illiquidity premium is: