Alternative is a broad term, taking in whatever is different from the conventional. In investments, that means anything that isn’t stocks, bonds or cash. It’s a large playing field that is attracting an increasing number of investors, including some of the wealthiest in the world. Returns can be high, but so can risks; what are some of these diverse investment opportunities and of what should the shrewd investor be cautious?
Private equity (PE) firms invest in the private equity of operating companies, and the strategy of secondary buyouts (SBOs), in which one PE firm sells a portfolio company to another PE firm, has grown in popularity. But along with the rise of SBOs comes concerns that the practice may diminish investor returns.