A client of yours has heard about private equity investing from some wealthy friends and asks you, the registered representative about it. This customer is age 51 and earns $160,000 per year. He is willing to assume a moderate level of risk in pursuit of higher returns. This customer has a liquid net worth of $450,000 and has a diversified equity and bond portfolio. You should tell the customer that the best way to make a private equity investment is to invest in a (n) :

Question

Halle Dalton

Business

1 November, 10:59

A client of yours has heard about private equity investing from some wealthy friends and asks you, the registered representative about it. This customer is age 51 and earns $160,000 per year. He is willing to assume a moderate level of risk in pursuit of higher returns. This customer has a liquid net worth of $450,000 and has a diversified equity and bond portfolio. You should tell the customer that the best way to make a private equity investment is to invest in a (n) :

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Answers (1)

Know the Answer?

Rudy · Answer 1

The answer is: Business Development Company (BDC)

Explanation:

Clients have two options for participating in the private equity market:

BDC Venture Capital (VC)

The problem with a VC, is that its aimed at very wealthy customers (usually millionaires) and this specific client is not one of those.

So the only possible choice is to invest in a BDC, which are listed investment companies and trade like any other stock.