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Aluma Capital (Pty) Ltd is a registered Financial Services Provider (FSP 46449) in terms of The Financial Advisory and Intermediary Services Act (37 of 2002)

What are Private Equity Funds and why you should be thinking about this Alternative Investment Asset?

April 21, 2022

What is a Private Equity Fund?

A Private Equity Fund is a pool of funds accumulated from institutional or private investors with the aim of acquiring or investing in private businesses that aren’t publicly listed on a stock exchange. These private businesses are invested in because they represent an opportunity for a high rate of return on the initial investment and usually come with a fixed investment horizon, usually anything from 4 to 10 years.

When the investment has reached its maturity date, it’s usually liquidated in the form of an IPO (Initial Public Offering) by listing its shares on a stock exchange, making them available for purchase by the general public or selling the business to another private equity firm or strategic buyer for a profit.

Why should you invest in Private Equity?

A Private Equity Investment is attractive as an alternative asset because in terms of performance, it gives investors and investment firms the opportunity to diversify their portfolios and take on a higher level of risk in return for the potential to earn significantly higher returns than they can through traditional investment in public companies.

Aluma’s Private Equity Funds

Aluma’s Private Equity Funds aim to protect the initial investment, maximise value, and generate superior returns for investors by strategically investing in high growth assets and niche industry opportunities.

The Aluma Private Equity Fund 1 is focused on growth and has a 5-year time horizon. The investment accrues profit over 5 years and at the maturity date, profits are distributed to investors.

The Aluma Private Equity Fund 2 provides investors with a superior monthly income. The investment has a 5-year time horizon and generates fixed dividend payments until the maturity date.

For more information on how to access investments that protect and grow your money, kindly Click here.