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I was speaking recently at an event put on by the Canadian Association of Alternative Strategies & Assets, an organization of managers, family offices and pensions, to engage in and share best practices about investing in the areas of private equity, real estate and hedge funds. The subject was the better performance of private equity over the public markets or stocks. Investing in private companies has been quite popular of late, and brokers, advisers and exempt market dealers have been singing the praises of this asset class. Now, they are bringing access to such investments to accredited retail investors who meet minimum net-worth or income requirements.
The siren song of better returns sounds appealing, especially given the weak returns from Canadian stocks, but should investors be like Odysseus and listen to the call, though with their hands bound, or place wax in their ears and ignore it? The answer: it depends.