FP Login   Home  | About GetAlts  |  Contact Us  |  Site Map
 
 

Traditional Private Investment Vehicles

For years, institutional investors, accredited investors and qualified clients have had access to alternative assets and strategies through investments in private investment vehicles, such as:

Hedge Funds

Investment vehicles used to pool investors' money together into a range of investments, typically implementing a variety of sophisticated techniques. Hedge funds themselves are not easily classified into one type of risk/return category. Each manager uses different investment strategies, has different return goals and may or may not employ varying amounts of leverage.

Venture Capital Funds

Provide financing and some participation in business decisions for a new or young company with potential for large returns in the future. They are possibly the most risky form of private equity because of uncertainty and risk in the future of those companies.

Private Equity Firms

These firms primarily look to invest large amounts of money into a small private company that is not traded on a public stock exchange-often either in preparation for an Initial Public Offering (IPO), or as a takeover of a public company that is struggling and needs reorganizing and/or restructuring.

The appeal of private equity investments lies with the potential of profiting from a company's turnaround with large monetary payouts and the possibility of an IPO. Entry into private equity often requires substantial investments-sometimes upwards of $1,000,000 and a lock-up period of multiple years.

Limited partnerships are the most prevalent form of private equity investment. While there is no involvement with the day-to-day running of the business, investments in a limited partnership may be locked up for 10 years or more.

 

PreviousContinue

The alternatives strategies and asset classes mentioned are not suitable for all investors. Many alternative strategies use sophisticated and aggressive investment techniques such as leveraging, short selling and derivatives. The more you invest in leveraged instruments, the more the leverage will magnify any gains or losses on those investments. The use of short selling involves increased risks and costs. You risk paying more for a security than you received from its sale. Theoretically, stocks sold short have the risk of unlimited losses. The use of derivatives such as futures, options and swap agreements may expose an investment to additional risks that it would not be subject to if you invested directly in the securities underlying those derivatives. Additionally, certain alternative strategies tied to hard assets such as commodities, currencies and real estate, may be subject to greater volatility as they may be affected by overall market movements, changes in interest rates or factors affecting a particular industry, commodity or currency, -such as droughts, floods, weather, livestock disease, embargos, tariffs and international economic, political and regulatory developments. No investment strategy can guarantee a return in a declining market. Additionally, an investor could lose all or a substantial amount of their investment. For more information about these strategies and their risks please consult your financial advisor.

This material is not intended to be a comprehensive overview of the subject matters discussed. It is intended to be general in nature and should not be construed as investment advice or a recommendation of any specific security or strategy. Before investing in any of the investment products or strategies discussed, consult with your financial advisor to determine if they are appropriate for your objectives, risk tolerance, income level and investing time horizon.

Rydex SGI offers funds with investment strategies similar to those referenced on GetAlts.com.

Read the fund's prospectus and summary prospectus (if available) carefully before investing. It contains the fund's investment objectives, risks, charges, expenses and other information, which should be considered carefully before investing. Obtain a prospectus and summary prospectus (if available) at www.rydex-sgi.com or call 800.820.0888.

Rydex SGI Funds are distributed by Rydex Distributors, LLC (RDL). Security Global InvestorsSM is the investment advisory arm of Security Benefit Corporation (Security Benefit). Security Global Investors consists of Security Global Investors, LLC, Security Investors, LLC and Rydex Investments. Rydex Investments is the primary business name for Rydex Advisors, LLC and Rydex Advisors II, LLC. Security Global Investors and RDL are affiliates and subsidiaries of Security Benefit, which is wholly owned by Guggenheim SBC Holdings, LLC, a special purpose entity managed by Guggenheim Partners, LLC, a diversified financial services firm with more than $100 billion in assets under supervision.

©2010 Rydex SGI. All rights reserved.