Investments in Private Capital: Equity & Debt

This Learning Module and the subsequent four Learning Modules explain the invest- ment characteristics of specific alternative asset types, starting with private equity and private debt. The subsequent Learning Modules focus on real assets, natural resources, hedge funds, and digital assets. Each Learning Module introduces core characteristics, distinguishing features, and risk–return characteristics for the specific asset class. Alternative assets differ from the traditional asset classes—debt and equity—due to their unique return, risk, and information profiles and historically show low levels of correlation with debt and equity. Moreover, alternative assets often require highly specialized knowledge to select, manage, and divest these assets. Since these alter- native assets are generally considered to be less liquid than traditional asset classes, understanding the valuation and return characteristics is a specialized skill.