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Are Private assets Overrated ?

While listed equities remain the cornerstone of financial performance, private assets have now established themselves as an increasingly accessible component for individual investors. What distinctive advantages does this asset class bring to portfolio construction, and at what cost in terms of constraints?

Les Echos recently raised a legitimate question: “Are Private assets Overrated ?”. A pertinent inquiry in a context where enthusiasm for private assets continues to grow, driven by the search for yield and portfolio diversification.

At Private Corner, we prefer to frame the debate differently: “Does private assets tailored for individual investors remain true to its fundamentals?”

A demanding model

In a market where liquidity is sometimes presented as a promise, we advocate for a more rigorous model. Private assets, as we envision it for private investors, must adhere to a framework aligned with institutional standards:

  • Successive capital calls, enabling the gradual deployment of capital.

  • Long-term holding periods, essential to capture the value creation inherent to this asset class and to absorb economic cycles.

  • Rigorous manager selection, ensuring the quality of underlying investments.

As Estelle Dolla aptly points out: “In private equity, the absence of liquidity anchors the investment over the long term, allowing for better absorption of market shocks.”

A strategic complement

Our conviction is clear, private assets should not be considered as a substitute for listed equities, but rather as a strategic complement based on its own specific mechanisms. It calls for an approach rooted in a long-term wealth management perspective, rather than opportunistic diversification. Funds that *mirror *institutional strategies ensure this coherence, with no compromise on objectives or investor education.

The democratization of private assets must not come at the cost of their distortion. The challenge of retailization is not to simplify private equity in order to make it more accessible, but to encourage individual investors to adopt the mindset of professional investors.

At Private Corner, we are convinced that only under these conditions can private equity truly earn its place in long-term wealth allocation. To explore this topic further, we invite you to read Les Echos’ article, available here.

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