Capital Dynamics logo

Research

Diversify your portfolio with private equity

download pdf

Summary

  • Private equity portfolios not only offer a source of attractive return, but also diversify investors’ equity allocation when constructed properly
  • Over the past 15 years, the average correlation between the European and US buyout markets and public equity has been 80%. Over the same period, the correlation of the European buyout market has been lower than that of the US buyout market
  • Concentrated private equity portfolios exhibit lower correlation. With a deliberate fund selection process, over-diversification can be avoided
  • We believe that the fundamental differences in the private and public equity investment models will remain, implying that the diversification benefits of investing in private equity will persist in the future

View/Download File