Building private equity portfolios is an area where Bilal Basrai excels in Chicago. His many years of experience in the financial and corporate world have taught him the best ways to build a private equity portfolio, and the many items that any investor should look for when selecting their equity investments.
The national and global economy are systems that are always in flux. As economies struggle, leading to bonds returning little to no profit, the ability to invest in a solid private equity portfolio is one way to stay ahead in the financial realm.
WHAT TYPE OF PRIVATE EQUITY PORTFOLIO HAS THE LARGEST CHANCE TO SUCCEED?
Most professionals in the field will agree that a concrete private equity portfolio with the largest chance for success and least amount of inherent risk will contain fifteen funds. This number may seem arbitrary, but it is well thought out and brings a level of diversification that is crucial to private equity success. The concept of not putting all of one’s eggs in one basket is never more appropriate than when considering private equity investment. When an investor purchases and invests in funds from fifteen differing areas or industries, they are lessening their future risk.
This does not mean that an investor can select any fifteen funds for their private equity portfolio. The funds chosen for investment should present sound possibilities for growth and return on investment. A person who invests in five winners will do far better than someone who selects fifteen mediocre funds.
GETTING INTO INTERNATIONAL INVESTING
For investors who wish to invest in international portfolio funds, the level of scrutiny they place on those potential assets must be high. An American investor who is buying a private equity fund located in Europe will wish to make sure that foreign fund can outperform similar investments in the United States. With the continual changes that are occurring in the United States that impact the economy, seeking European private equity funds is a smart decision. These international investment opportunities are proving to be far more fruitful than their American counterparts, when chosen pragmatically.
FINDING LOW RISK HIGH RETURN ON INVESTMENTS
It may be tempting for investors to select the funds that are the largest in capital or investment. This is not always the smartest route to high return on investment. When selecting fifteen strong private equities to fill out a portfolio, those that are known to provide mid-range caps on returns actually offer a better overall return on investment. In this respect, the largest companies and investment funds are not always the best financial producers for a private equity investor.
One of the easiest rules of thumb that most investors subscribe to is that a smaller fund diversification is easier to manage and control than a large investment scheme. If the private equity investor selects five or ten giant investments simply because of their size, the performance of the stocks and returns will likely leave them disheartened. Instead, Bilal Basrai has learned that spreading their investment capital between fifteen mid-range level funds that are easier to maintain and follow will prove more successful.
Working with capital markets is one of Bilal Basrai’s many skills in the business world. Having served as an executive for many large financial institutions, he understands the importance of capital markets and the many ways they can affect the entirety of an economy.
