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jerryking : illiquidity   6

Flight Risks
November 2005 | Worth | by Dan Rosen.

Angel investors often get caught up with charismatic and passionate entrepreneurs. It‘s the joy and the danger of angel investing. For angel investing to work, investors and entrepreneurs need that shared passion and vision. But angel investing is not for the faint of heart. Seedstage investments tie up your money for a long time because you are investing early in the life of a company whose typical gestation period is six to eight years. No individual can do (nor does a relatively modest investment justify) the depth of analysis and due diligence that professional investors such as venture capitalists conduct; that often makes decisions difficult. And the likelihood that several additional rounds of financing will follow your initial investment and dilute your stake causes a large financial risk....Know your strengths, weaknesses and desires. If they don‘t match angel investing, don’t do it. If they do, have Fun.
angels  due_diligence  illiquidity  start_ups  financial_risk  risks  passions  strengths  early-stage  weaknesses  self-awareness 
march 2013 by jerryking
Endowments: Ivory-towering infernos
Dec 11th 2008 | The Economist |From the print edition.

As Mr Swensen explains in his influential book, “Pioneering Portfolio Management: An Unconventional Approach to Institutional Investment”, which was published in 2000, the “permanent” endowments of universities (and of some charitable foundations) meant that they could be the ultimate long-term investors, able to ride out market downturns and liquidity droughts.

By investing heavily in illiquid assets, rather than the publicly traded shares and bonds preferred by shorter-term investors, an institution with an unlimited time horizon would earn a substantial illiquidity premium.
Yale  Harvard  time_horizons  endowments  Colleges_&_Universities  illiquidity  alternative_investments  private_equity  institutional_investors  long-term  books 
february 2013 by jerryking
Unique aspects of private equity
February 13,2006 | Pensions Week |

Investing in private assets such as private equity often involves a number of unique considerations that investors do not face with traditional investments like stocks, bonds and cash. These include: 1. inability to trade easily in and out of the investments,2. uncertain capital calls. 3 uncertain distributions, and 4. uncertain valuations. How do these unique aspects of investing in private assets affect an investment portfolio? Each of the issues outlined above represents a unique source of uncertainty for investors: uncertainty about cash inflows and outflows, valuations. and about the portfolio weightings they might hold at any time in these and other asset classes. These sources of uncertainty, therefore, are similar in character to one of the standard buildmg blocks of portfolio construction: risk
private_equity  uncertainty  valuations  illiquidity  risks  asset_classes  uniqueness 
august 2012 by jerryking
Wisdom & Fair Warning
April 2004 | Robb Report Worth | by Laurence Neville
private_equity  IRR  illiquidity 
may 2012 by jerryking
Wealthy Investors Discover Timberland -

The timber business as an asset class makes sense only for ultrawealthy, ultralong-term
investors.Timber isn't lumber, the commodity that trades as relatively
short-term futures contracts. Timberland is the farm from which lumber
ultimately comes, and is a long-term holding.Think decades.Timberland
investing works best at scale = a difficult investment for people of
lesser means.Small plots lack the muscle to generate meaningful income,
since only a fraction of the trees are culled at any one time.The avg.
timber tract is = 400 acres in the Southeast, the US 's wood basket.At
roughly $2k/acre, that's an $800k ante just to play.

Wealthy individual investors typically put their money in timber
investment-management organizations, or TIMOs, which cater largely to
institutions, but which often accept individuals investing a minimum of
between $1 million to $5 million. Some TIMOs do allow individuals to
pool money into a single account to meet the minimum.
assets  asset_classes  economies_of_scale  farming  forestry  high_net_worth  illiquidity  investors  long-term  lumber  timber 
may 2010 by jerryking

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