Private assets are having a moment. In my conversations with investors, everyone seems to be pitching them. Over the past couple of years, investment “opportunities” that were once reserved for sophisticated institutions and ultra-high-net-worth individuals have increasingly been packaged and pitched to everyday investors through retail funds, advisors, and platforms.
I was told that the private credit industry has expanded significantly, growing from USD500 billion a decade ago to approximately USD2 trillion in 2025. The appeal makes sense. Return potential, reduced volatility, and diversification from public markets.
Sounds great on paper and who would not want that? Just because something is popular (or previously exclusive) does not mean it is right for everyone.
Private investments often come with lock-up periods longer than some gym memberships, limited liquidity and complex fee structures, and less transparency to some people. What works for institutions does not always work for individuals especially if it is not aligned with your goals, liquidity needs, or time horizon.
In fact, I have had some investors who needed to withdraw profits from their other accounts just to meet the funding schedules for their private commitments. Pulling from one pocket to fund another can create unintended pressure on your broader financial plan.
Hold your fire! Do not get me wrong. These investments can be excellent for diversification. When used appropriately and sized sensibly, they can add meaningful value to a well-constructed portfolio only if you have done the homework.