Why Consider Including Private Assets in Your Investment Portfolio?
When building a diversified investment portfolio, the focus commonly lies on publicly traded stocks and bonds. However, private assets, such as private equity, real estate, private credit, and infrastructure, offer unique advantages that can enhance the performance and resilience of a portfolio over the long term. Moreover, for those seeking to align their investments with their faith and values, private assets can provide powerful opportunities for impact investing.
What Are Private Assets?
Private assets are alternative investments (i.e. those not traded in public markets). They often involve direct ownership or participation in private companies, real estate projects, or specialized funds. These opportunities are typically available only to accredited investors, but changes in law and innovations in the financial industry are expanding access to certain private investments for all investors, including those seeking investments that align with faith-based values.
The Value of Private Assets
Private assets provide several potential benefits:
Enhanced Diversification - Private assets often behave differently than public stocks and bonds, helping to reduce overall portfolio volatility. Their performance is less influenced by daily market movements, making them potentially a stabilizing force during periods of market turbulence.
Potential for Higher Returns - Private investments, such as private equity and venture capital, often provide opportunities to invest in companies or projects at earlier stages of growth or in areas not easily accessible through public markets. For example, these could include small businesses with strong potential but limited funding, private real estate developments in high-demand areas, or innovative startups poised to disrupt their industries. Because these investments are not as widely available or highly traded, they can offer higher potential returns compared to traditional markets. While these opportunities often involve higher risks and longer time horizons, the potential for significant growth over time makes private assets an attractive option for those seeking to enhance their portfolios.
Access to Unique Opportunities - Private markets provide access to investments not available on public exchanges, such as private real estate developments, private credit, or mid-sized companies looking to grow. For faith-driven investors, there are increasing opportunities in private investments that prioritize ethical, socially responsible, or biblically aligned principles, allowing you to invest in businesses that reflect your values while benefitting from the potential for strong financial returns.
Reduced Short-Term Volatility - Unlike publicly traded stocks and bonds, private investments are not subject to the constant valuation pressures of public markets, which helps buffer portfolios from the day-to-day swings of market sentiment and thereby can reduce volatility. In addition, private assets often involve long-term investments in projects or businesses that prioritize sustainable growth and operational improvements over short-term performance. For example, private equity funds typically focus on increasing the value of a company through strategic management and operational efficiency, rather than reacting to quarterly earnings reports. By complementing public market investments with private assets, investors can build a portfolio designed to balance long-term growth potential and reduce exposure to short-term volatility, creating a more resilient financial strategy.
Who Can Invest in Private Assets?
Historically, private investments were restricted to accredited investors due to regulatory requirements. However, some fund managers now offer private investment options with lower minimums and broader eligibility, allowing non-accredited investors to participate indirectly through diversified vehicles like interval funds or REITs.
For faith-driven investors, the landscape is also expanding. More investment opportunities are becoming available that integrate biblical principles, offering faith-aligned investments in sectors such as renewable energy, affordable housing, education, and healthcare. These investments seek to generate positive returns while promoting ethical practices that support Christian values.
Balancing Risks and Rewards
While private assets offer compelling benefits, they are not without risks, including:
· Liquidity Concerns: Private investments are typically less liquid, meaning funds may be tied up for years.
· Complexity: These investments often require deeper due diligence and reliance on active management expertise.
· Higher Costs: Private investments may involve higher fees than traditional options.
For these reasons, private assets should complement, not replace, a core portfolio of diversified public investments. A thoughtful allocation tailored to your financial goals, risk tolerance, liquidity needs, and faith-driven values can help you capture the benefits of these investments and avoid overextending into illiquid or high-risk areas.
How We Help
At Miller Wealth Management, we guide clients in assessing whether private assets align with their financial goals and overall strategy. For accredited investors, we can help navigate private opportunities such as private equity funds or real estate partnerships. For non-accredited investors, we explore accessible options that provide exposure to private markets through diversified structures. Additionally, we offer expertise in sourcing private investments that are aligned with faith-based values, ensuring your financial decisions are in harmony with your personal beliefs.
If you’re curious about how private assets could enhance your portfolio or want to learn more about faith-aligned private investments, we’re here to help. Let’s explore how private investments might fit into your financial plan while honoring your values.
Miller Wealth Management is a team of EverSource Wealth Advisors, LLC, a Registered Investment Advisor.
Disclaimer: This commentary is not a substitute for specific, individualized financial advice, and you should obtain your personal tax advice from a qualified tax professional. Private investments, such as those described in this commentary, are speculative, involve a high degree of risk, can be highly illiquid and complex, and are not suitable for all investors. These investments are typically not registered with any federal or state regulator and therefore are only available to either accredited investors or qualified purchasers. Before making an investment of this type, you should carefully review the offering documents, including the private placement memorandum, term sheet and subscription agreement, with your legal, financial and tax advisors.