Private Investments: What Accredited Investors Should Know Before the Pitch

Cross the accredited-investor thresholds and the pitches begin: private equity feeders, private credit funds, real estate syndications, pre-IPO platforms. The marketing leans on institutional mystique, endowments do it, but endowments buy access, diligence, and fee terms an individual rarely gets. The honest starting point: private markets contain genuine opportunity, enormous dispersion between good and bad funds, and a fee structure engineered to be paid regardless.

Here is the working skepticism that separates diversification from decoration.

What the Returns Data Really Shows

Median private equity funds have delivered returns comparable to public small-cap equities after fees, with the celebrated outperformance concentrated in top-quartile managers whose next funds are oversubscribed by institutions. Manager selection is nearly everything, and past quartile is an imperfect guide. Private credit's yields come with credit and illiquidity risk that has not seen a full default cycle at today's scale. Real estate syndications lean on leverage and sponsor skill; the 2022-2024 rate cycle sorted those quickly. None of this says never; it says the burden of proof sits on the product.

The Five Questions That Deflate Most Decks

One: all-in fees, management, carry, servicing, platform layers; feeder vehicles often stack 1-2% on top of the underlying fund's 2-and-20. Two: liquidity in writing, lockups, gates, redemption queues; interval funds and non-traded REITs have gated exactly when holders wanted out. Three: who marks the assets and how often, smooth quarterly marks are a feature of appraisal lag, not low risk. Four: alignment, how much of the sponsor's own money is in, and do they earn fees even in failure? Five: the hurdle, after fees, taxes (often ordinary income plus a K-1 in April), and a decade of lockup, what must this beat? A taxable investor's alternative is a low-cost index portfolio with decades of evidence behind it.

If You Allocate Anyway

Cap privates at a slice you can truly forget, commonly 5-15% of investable assets, funded only after tax-advantaged space and liquidity needs are full. Prefer institutional-quality managers over platform novelties, diversify across vintage years rather than one big commitment, and model capital calls, commitments draw over years and the cash must be there. Expect the K-1s to delay your tax filing and price that annoyance in. And never let an illiquid position become the money that a retirement date depends on.

The Quiet Conflict to Watch

Private products pay distributors well, which is why they are pitched enthusiastically by platforms and some advisors. Ask any recommender exactly what they earn on your subscription; a fee-based fiduciary should answer in one sentence. Attend's investment management holds no house products and earns nothing from placements, which keeps the analysis clean: when a private allocation fits, it fits on evidence.

Tony Colunga · Founder, Attend Wealth

Tony leads Attend Wealth, a fee-based wealth management firm in Atlanta serving professionals, families, and business owners. Advisory services are held to a fiduciary standard. More about Attend