{"type":"rich","version":"1.0","provider_name":"Transistor","provider_url":"https://transistor.fm","author_name":"Wealthyist","title":"Wealthyist E12 | Private Equity - What Do We Need To Know?","html":"","width":"100%","height":180,"duration":1292,"description":"In this episode of \"Wealthyist,\"  Liam McKinney, Wealth Strategist at Annex Wealth Management, featuring Brian Jacobson, the Chief Economist at Annex Wealth Management. The episode focuses on private equity, its appeal to wealthy investors, and its role in portfolio diversification.The podcast begins by highlighting the growth of private equity, noting that in 2024, U.S. private equity deal value rose 19.3% from the previous year to $838.5 billion. Private equity is defined as investing in companies not traded on public exchanges, contrasting with public equity like stocks on the NYSE or NASDAQ. It encompasses a range of investments, from venture capital for startups to ownership stakes in established businesses, with the goal of creating value through transformation—either by improving efficiency, scaling operations, or preparing a company for sale to a strategic buyer.The discussion explains how private equity differs from public markets, where companies often rely on retained earnings or debt for growth. Private equity provides capital to businesses, sometimes with investors taking a passive role and other times exerting control to drive change. Two common investment vehicles are discussed: \"drawdown funds,\" where investors commit capital that’s deployed as opportunities arise, and \"perpetual strategies,\" which offer a continuous pipeline of investments and more liquidity options (e.g., quarterly redemptions). Drawdown funds are riskier due to their smaller scope and longer lockup periods, while perpetual funds provide quicker capital deployment and potential exits.Private equity appeals to wealthy investors due to its potential for higher returns and diversification. With fewer public companies (down from 8,000 in 2000 to 4,500 today) and an estimated 40,000 private firms suitable for investment, it offers a broader opportunity set. However, it comes with risks, notably illiquidity—investors must commit to long-term holdings (often around seven years)—and the...","thumbnail_url":"https://img.transistorcdn.com/VFxI0v6MoqF1WQMIedq1sXm8YG0xmJibQHoQelEQpbk/rs:fill:0:0:1/w:400/h:400/q:60/mb:500000/aHR0cHM6Ly9pbWct/dXBsb2FkLXByb2R1/Y3Rpb24udHJhbnNp/c3Rvci5mbS9kODU2/N2FiYTYxNjM1NDA0/NTM4OWY4OWE1YTdl/NmRmMC5qcGc.webp","thumbnail_width":300,"thumbnail_height":300}