There is not a lot of data to call upon to glean the performance of direct private investments; however, based on a large, robust study focused on institutional investors, family offices should know that the performance of this type of investing has been mixed at best.
The past couple of years have proven to be banner years for private equity and merger and acquisition activity, with no signs of slow down in 2019. With cash on hand to invest and the increase in Representation and Warranty Insurance policies, forecasters expect these trends to continue.
Cannabis capital market transactions exceeded $14 billion in 2018, double the aggregate total from the five years combined. While the hype surrounding the industry is palpable, there are concerns over federal illegality.
Private investments, particularly private equity and venture capital, have provided the strongest relative returns for decades. For families with multigenerational wealth, they may be particularly well positioned to consider allocating 40% or more of their assets to private investments.