Private equity funds are investment vehicles that directly invest in private companies. These funds raise capital from both retail and institutional investors and utilize it for various purposes such as funding new technologies, expanding working capital, making acquisitions, or strengthening a company’s balance sheet.

The majority of private equity investments come from institutional investors who can commit significant amounts of money for extended periods of time. These investments often require long holding periods to allow for the turnaround of distressed companies or to facilitate liquidity events like an initial public offering (IPO) or sale to a public company.

The private equity funds offered through Cornerstone differ from venture capital investments, which typically involve high risks and the potential for substantial returns. Instead, these funds focus on investing in existing successful companies that aim to expand their business in terms of size and scope. They are accessible to smaller accredited investors and offer shorter project hold periods of 3-6 years. Additionally, these funds have relatively low investment minimums, starting as low as $5,000, and can provide significant returns in the form of cash flow during the holding period, along with the potential for substantial appreciation. While they fall under the umbrella of private equity, these funds have a risk/reward profile similar to other alternative investment funds.