Hello, all:
I searched the forum, but did not find much about private equity. The only thread I did find was mostly hot takes from people who did not have experience with it. So, I am posting this.
What does everyone think of private equity investments? Hot takes are welcome, but I’m especially interested if anyone has actually invested in any private equity funds and what their experiences were.
Is it just a scam that profits salesman at Morgan Stanley/Goldman/etc.? Will the taxes on top of the fees rip your eyeballs out? Or have I finally stumbled across the secret that rich people use to get richer? Something in between?
I have the opportunity to invest in a private equity fund using a (currently) low interest rate loan tied to LIBOR. Begins paying off after 3 years, you get your money back after 5-6, and everything after is profit. They claim they’ve hit 16% and higher returns on past funds.
I understand how they work generally, but there’s obviously lots going on behind the scenes that I’m not privy to.
EDIT: I should add, I could invest with my own cash and not use margin, but I’d use the loan unless interest rates jacked up and in that case I’d pay it off.