Learn about private equity
Benefits of the PE Bond
The PE bond structure allows exposure to private equity, by reducing the traditional hurdles that investors face when trying to access this asset class:
- Allows for smaller minimum investment sums
Private equity investments typically require large amounts of initial capital outlay. PE bonds require much smaller initial capital outlays
- Shorter holding periods
Private equity investments typically have long holding periods of about 10 years. PE bonds have much shorter terms of 3 to 5 years
- No J-curve
PE investors must be comfortable with the J-curve effect, which exposes them to negative cash flows in the initial years. PE Bonds behave like normal bonds and do not experience the J-curve effect
- Access to fund managers
It is typically difficult to gain access to reputable fund managers. Astrea’s PE bonds are backed by portfolios of PE funds managed by reputable fund managers
Buying and selling PE interests take several months and require brokers to be involved. PE Bonds are listed, allowing trading of the investments to be done easily
For more information on private equity and the traditional barriers to entry of this asset class, please refer to our primer on private equity.
The information regarding private equity bonds has been derived from general information which is publicly available as well as generic structural information from previous issues of Astrea private equity bonds which is also publicly available. The information is included for information purposes only and has not been independently verified by Azalea and its affiliates and should not be regarded as an indication of the future performance or results of the fund investments, or private equity bonds or the private equity industry generally.
Other topics in
- What is Private Equity?
- What is a Private Equity Fund?
- Investing in Private Equity Funds
- Risks in Private Equity
- McKinsey Global Private Markets Review 2022
- Bain & Co Global Private Equity Report 2022
- Fitch Ratings Special Report - PE CFOs Stable After Coronavirus Recovery
- Fitch Ratings – PE CFO Update: 3Q21
- McKinsey Global Private Markets Review 2021
- Bain & Co Global Private Equity Report 2021
- Bain & Company Global Private Equity Report 2020
- McKinsey Global Private Markets Review 2020