Module 44.2 LOS 44.g: Risks and Costs of Investing in Private Equity

Private equity investing comes from some unique costs and risks. Cost wise, PE funds charge transaction costs, fund set up costs, administrative costs, audit costs, management and performance costs, dilution costs and placement fees. 

Risks inherent to PE funds include liquidity risk, unquoted (no public market price) investment risk, competitive environment risk, agency risk, capital risk, regulatory risk, tax risk, valuation risk, diversification risk and market risk.

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