Private equity was noticeably left out of retirement savings portfolios for many years. A 2020 Department of Labor ruling changed that when it clarified that private equity was an acceptable form of investment in retirement savings plans. Due to the high reward potential of private equity and venture capital investments, the popularity of these types of investments has grown in recent years.
When you invest in private equity, you are investing in private companies with the goal of improving their value over time. Usually, it’s not until a larger company buys the company or goes public that you see a return on your investment. Venture capital is a subset of private equity focusing on early-stage startups with high potential growth.
