Private equity has long been a staple allocation for endowments, foundations, and high-net-worth families, and Fred Hubler leans on an unlikely reference to explain it: Richard Gere’s character in Pretty Woman, who ran a private equity firm that bought companies and either combined them or broke them apart. In plainer terms, he describes private equity as ownership or interest in an entity that isn’t publicly listed or traded, with capital coming from firms that buy stakes in private companies or take public companies private by delisting them from stock exchanges.
Hubler breaks down two main ways investors access the space. Direct private equity means investing straight into a private company, typically through firms that source individual deals and give investors a stake in multiple private firms over a 6-12 month window. A private equity fund of funds, by contrast, is a pooled vehicle that invests across multiple private equity funds rather than individual companies, helping investors diversify, reduce risk, and access funds that often carry minimum investment requirements otherwise out of reach.
The takeaway is refreshingly simple: you don’t need to be an institution to access private equity anymore – a fund of funds can get you there.
Read Hubler’s complete guide on Forbes, Uncovering The Secrets Of The OG Of Alts: Private Equity.