To a rich individual or family office, investing in a private equity fund seems like a good idea. It's long-term (like your time horizon), it's tax-friendly, and it's in the area of expertise that likely produced your fortune in the first place--running, improving, and selling businesses.
Not so fast though. The PE industry, which had about a five-year run of spectacular success and mushrooming growth, creating as many geniuses as the dot com boom, is not everything it seems. It's not dead, and part of my task as your Investor's Consigliere is to find the next great PE funds, but investors must proceed with caution.
In the Catholic church, one cannot ascend to sainthood without first overcoming the arguments of the Devil's Advocate. Similarly, one should not invest in a private equity fund, especially now that it's clear there are so many more funds than geniuses, before overcoming the arguments of these two PE Devil's Advocates: