What this module covers
Modules 05 to 08 describe four private asset classes one at a time: private equity, private credit, private real estate and venture capital. This module sets them side by side. It compares them on relative risk, horizon, whether they pay income or seek growth, and commonly seen minimum commitments. It then describes how the four sit relative to one another on risk and return, and closes with the questions that separate them.
- The four classes side by side
- Reading the comparison
- Risk and return
- The dimensions that separate the classes
The four classes side by side
| Private equity | Private credit | Private real estate | Venture capital | |
|---|---|---|---|---|
| Relative risk | Higher | Lower within private markets for senior lending; higher further down the capital stack | Moderate, rising from core to opportunistic | Highest |
| Typical horizon | 7–10 years | 2–5 year terms | 5–10 years | 10 years or more |
| Income or growth | Growth: returns arrive as investments are sold | Income: regular distributions | Both: rental income plus any gain on sale | Growth: returns arrive at exit |
| Minimum commitment (commonly seen) | About $100,000 to $1 million or more | $25,000–$100,000 | $50,000–$250,000 | Varies widely |