Expanded Availability of Private Credit and Equity

Expanded availability of complex investments maybe a canary in the coal mine.

Private credit and private equity used be only available to accredited investors with $1,000,000 net worth or higher.  The returns from private equity and credit were higher, but involved a large investment amounts, a  lockup period and higher risk.

Recently, private credit and private credit are being made available to people with much lower net worth and lower investment amounts.  This being done through investment companies grouping investors and then selling smaller "slices" of private credit or private equity to individuals.  

I have been offered private equity and private credit investment opportunities.  While the returns are higher, I am still reluctant to invest in these.  First, there is the lockup period, which is 5-10 years, although there are some periodic withdrawals.   Second, there is no guarantee the original investment will be returned.    Third, the increase in return is not worth the higher risk for me. Fourth, diversification of risk doesn't  protect if the entire market fails.  I remember in 2007, when mortgage backed bonds were grouped together and sold as slices to individual investors.  The market collapsed and resulted in the Great Recession of  08/09. 

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This is not financial advice. Please consult a professional advisor.

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