Private Equity FAQs
What are the potential returns for me?
In the worst case scenario, a complete loss of investment is possible, whereas the potential upside can run into many multiples of the sum invested.
How do you pick the right companies for me to invest in ?
Central Markets (London) Ltd is a medium sized private stockbroker. Using a wealth of contacts, we aim to source the best capital growth opportunities, for clients regardless of sector. Central Markets (London) Ltd researches each opportunity before narrowing the options down to the companies we believe are right for our investors.
What are the risks for my investment?
It should be remembered that all our investments are classed as high risk. This can be due to a number of factors but most commonly the lack of liquidity in securities of private companies, the early stage nature of some companies or the unadopted nature of new technology. You should only invest if you can afford to lose the whole of your investment.
What is the average investment size per investor?
This depends on many factors such as portfolio size, income or knowledge of an individual sector. The first step is to make sure you agree that the company is worth investing in before deciding how much to invest in it.
Should I consider short, medium or long term?
A sensible view with this sort of investment is to commit to the medium to long term (18 months to several years) in order to achieve the desired level of return. Occasionally, exits can happen sooner than this.
How do I keep up to date on my investment?
We insist on the companies issuing investors with regular updates directly from the Board. Your broker will also keep you up to date with all new developments on your investments. Obviously for those companies that achieve a listing then their share price, as well as any news announcements, will be in the public domain.
How much Private Equity should I have in my portfolio?
This will vary considerably depending on age, income, portfolio value, risk sensitivity and knowledge. As a guide we suggest a maximum of 15% of a portfolio to be in the high risk/capital growth area.
How do I build a portfolio in Private Equity?
One major advantage our clients enjoy is the opportunity to assess the details on each individual company, before deciding whether or not to invest. They will have at their disposal the fully comprehensive documentation that accompanies each company and details all available information on directors, finances, company performance and other vital facts. We usually suggest a client builds a portfolio containing six to eight individual investments in order to spread the risk over a number of sectors. But many clients continue to grow their capital growth portfolio based solely on the quality of each company.