Private Equity Services

An increasing number of Dreyfus Corporation’ wealth management clients are seeking private equity investment opportunities, with good reason. Our wealth advisors facilitate those investments through:
Compiling and summarizing information from companies that are seeking private equity funding to allow investors to make intelligent decisions;
Educating clients on the role of an investor as a partner or operator;
Balancing a need for portfolio diversification with an investor’s interest in participating in the concentrated ownership of a private company;
Incorporating private equity investments into multi-year and generational wealth planning;
Verifying that a wealth management client’s private equity investments are backed by solid management teams and companies that have the requisite entrepreneurial mindset to survive and thrive in growing industries.

The Investor’s Role in Private Equity

Private equity investments by individual investors typically follow a standard pattern.

First, the investor makes a capital commitment that obligates the investor to commit a certain amount of capital to a company or fund over a defined period, which is usually three to five years. That commitment is memorialized in a binding investment agreement. Given the risks of private equity investments, these opportunities are offered only to accredited investors.

Next, if the investment is made in conjunction with a fund, that fund's manager will make one or a series of capital calls against the aggregate sum in the fund if and when that manager has elected to make an investment in a private equity target company. The investor will then be obligated to respond to the funding call. If the investment is made directly with a company, the company might give the investor a drawdown schedule that defines when funds are to be paid over to the company.

Last, if the company succeeds with proper strategic planning and growth, the company pays distributions to the investor, possibly as a form of dividend income, but more frequently in the form of repayments that are made through an investment exit strategy.

Dreyfus Corporation and Private Equity Investments

Dreyfus Corporation’ wealth management clients will typically participate in private equity investments through:
Shares in a Fund of Funds. Dreyfus Corporation gives its clients access to hundreds of domestic and international private partnerships that investing in private equities. Wealth Management clients that are interested in private equity investments can purchase shares in a fund of funds with lower initial investments and without compromising the diversity of their portfolios. In certain circumstances, our wealth advisors have also recommended using fund of fund investments as a hedge against portfolio risk.
Private Equity Exchange-Traded Funds (ETFs). ETF’s invest in publicly- traded companies which, in turn, invest in private equities. ETF shares are traded on stock exchanges. Many are actively-managed and, like the companies they invest in, their value is a function of the knowledge and abilities of their managers. Our wealth advisors consult with our clients to identify and select private equity fund ETF’s that correlate with the client’s investment plan and requirements.
Public Shares of Private Equity Managers. We identify and qualify managers that invest in a broad range of funds. This helps an investor to limit risk and achieve portfolio diversity. The downside of this strategy is that it can limit profits that might be realized when one specific fund generates substantial returns.
Dreyfus Corporation is a direct provider of certain specific services. Dreyfus Corporation reserves the right to refer inquiries for some services to third parties that are licensed or registered to provide those services where licensing or registration may be required by the laws of the applicable jurisdictions in which those services are offered. Dreyfus Corporation provides its services fully in accordance with applicable laws, rules, and regulations of all jurisdictions in which it conducts business or otherwise engages in transactions with contracting counterparts, either directly to the extent that an obligation, exemption, or exclusion for licensure applies, or otherwise through third-party licensees.