Public equity funds are a popular alternative investment option. These funds proactively seek private market opportunities and provide ready investment capital across all market environments. Private equity funds are generally managed by private equity firms, but they can buy public firms, as well. The key benefit of PE funds is that they can acquire shares of a company without the hassle of going through a public offering.
These funds invest in a variety of securities that follow an investment strategy. These strategies can range from venture capital to buyouts and financing small and medium businesses. They can also be industry-specific or more broadly based. Public equity funds are often organized as an open-end unit trust, and they raise money through an initial public offering (IPO). The money raised through the offering is invested in the assets the fund will own.
A public equity fund can be structured to invest in companies that are creating positive social and environmental impacts. These funds typically have a smaller portfolio than a traditional public equity fund. This allows the fund managers to engage with company management to improve impact measurement and reporting. They can also seek to reduce risks associated with tobacco investments, which are commonly included in public equity funds.
A public equity fund is an excellent alternative for investors seeking a low-risk investment strategy. These funds are designed to provide diversification, and the average investor can start with as little as $1,000. Using a long-term index fund is a good way to diversify your investments and gain exposure to public equity.