Use the Same Private Equity Strategy as America’s Wealthiest Investors

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I don’t think too many of us expected the stock market to post nearly a year’s worth of average returns in less than one week — a week that just so happened to include the most contested presidential election in history.

a business man whose suit is comprised of numbers and charts standing in an office

Source: Shutterstock

And we still don’t know who won!

Yet that’s where we are. The S&P 500 has gained more than 7% this week, making it loud and clear that the market is comfortable with split power in Congress, no matter whether Donald Trump or Joe Biden sits in the White House.

I go into more depth about what we know and what investors should do now in today’s special post-election MoneyLine podcast. That includes diving into specific stocks, so I hope you’ll check it out now.

Even as money pours into stocks, there’s a unique opportunity I want to make sure you know about. The largest pension fund in the nation is investing more of its money here as it absolutely must boost its return.

It could help you make a lot more money as well …

Imagine you’re in charge of a $410 billion fund that pays retirement benefits to more than two million people and their families.

Now … imagine that fund is shy of the money it needs to pay out. I’m talking billions of dollars short.

That’s the situation faced by the largest public pension fund in the nation — CalPERS, which is short for California Public Employees’ Retirement System.

If you’re in charge, you need to find a way to make that up, right?

That means earning more on your investments.

CalPERS faces a serious situation, so the fund and outside consultants conducted a study to determine how to make up the shortfall. They identified two asset classes “powerful enough” (as The New York Times put it) to get the fund’s average annual gains up to 7%.

One was distressed debt, which you generally don’t have access to. And besides, it’s risky to take on the debt of a troubled company anyway.

The other asset class — private equity — used to be unavailable to most individuals, but now it is.

The gains in private deals can definitely be powerful enough to boost your returns … and in a big way. That’s why more and more money continues to flow into these investments.

Earlier this week I introduced you to the JOBS Act. I said that amendments were added to it that finally opened up a “secret” market to the average investor.

That was Regulation A — referred to as “Reg A” — which was the breakthrough that opened private investing to the entire market. It went into effect in June 2015, and the amount invested keeps growing:

  • June-December 2015: About $10 million
  • 2016: A remarkable 23X jump to approximately $230 million
  • 2017: $430 million
  • 2018: $736 million
  • 2019: More than $1 billion

You can see the trend. Add it all up and between June 19, 2015 and December 31, 2019 more than $2.4 billion was invested in 183 companies.

With another regulation that has also opened the doors to private deal flow — Regulation Crowdfunding, or Reg CF — we see a similar trend:

  • After it went into effect in May 2016, it took about 410 days — or roughly 13.5 months — for startups to bring in a total of $50 million.
  • The second $50 million came in only half the time. Approximately 200 days later, in late January 2018, total capital raised doubled to $100 million.
  • By April 2019, the total amount of money raised through Reg CF offerings doubled again to hit $200 million.

So, it took 24 months for the first $100 million to be raised … 15 months to bring in the second $100 million … and just six months for the third $100 million.

These changes help put potentially life-changing wealth at your fingertips.

These private deals are very similar to how a venture capitalist buys into an early stage startup … or a private equity investor takes over a private business.

In other words, they are not available on the traditional stock market.

That may sound a little scary, but it’s really not. And I want to explain it to you at my upcoming special event on Tuesday, November 10 at 7 p.m. ET. It’s completely free to attend. All you need to do is register here.

The list of private businesses that generated millions and even billions of dollars for early investors is a long one.

Here’s just one example: The first investors in publicly traded Facebook (NASDAQ:FB) stocks are now up 5X. But that isn’t even close to how private Facebook shares performed … they saw a 1,200X gain!

It’s no secret why private venture investing is hugely popular with America’s rich. The common cliché is true … the rich grow richer while most everyone else struggles to get ahead.

But now, instead of being mad about not being in the top 1% that can get in on these deals, you can use the same strategy that has helped America’s wealthiest families grow richer … year after year.

Backing private businesses may be the highest upside investment you can possibly have. I hope you’ll click here to register now and join me next Tuesday for details on just how to get in on the exciting opportunity and put another tool of the wealthy to work for you.

On the date of publication, Matthew McCall did not have (either directly or indirectly) any positions in the securities mentioned in this article.

Matthew McCall left Wall Street to actually help investors — by getting them into the world’s biggest, most revolutionary trends BEFORE anyone else. Click here to see what Matt has up his sleeve now


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