Beware the Lure of “Exclusive” Private Investments

If you are approached about private equity or private credit, the pitch will almost certainly be compelling. These products are sold by highly trained, highly compensated salespeople. Their pitch leans heavily on the psychology of exclusivity — the feeling of having access to an entirely different asset class, simply due to your wealth status. But behind that sophisticated sales pitch are products engineered to generate enormous fees for the firms selling them, regardless of whether investors come out ahead.

Crown delivers institutional-quality private equity and private credit opportunities, similar to what you’d find at the largest banks but with some important differences — no hidden agendas, lower/transparent fees, and full portability (your investment can come with you, even if you leave Crown). Every decision starts and ends with your plan, with no conflicts of interest.

The reason Wall Street loves private investments is simple: the fee structures are layered and complex, often including annual management fees, performance fees, monitoring fees, transaction costs, and other charges buried deep in offering documents. On top of that, banks themselves may earn placement fees, distribution fees, or advisory revenue from the very same companies they are encouraging clients to invest in. It’s a system designed to reward the seller at least as much as the investor.

Another feature of these products — which quickly turns into a bug — is that they are not transferable. Once you commit, your investment must stay at the bank for the life of the fund, often 7–10 years or more. For the bank, this is gold: it keeps your assets locked in place. For the client, it means far less flexibility. And for advisors, it makes it harder to leave the bank without losing relationships. With so many advisors and clients moving to independent firms like Crown, banks use private investments to slow the bleeding.

At a time when private investments are being marketed as exclusive invitations, it pays to ask: exclusive for whom? The reality is that the most reliable profits in these funds go to the sponsors and distributors. By working with your Crown Personal CFO, you can pursue the benefits of private equity and private credit while avoiding the traps of conflicted sales tactics. That is the difference between being sold a product and being guided by a fiduciary. We believe private investments can play a role in the right portfolio, at the right time, and under the right structure.

Crown currently has access to over 75 different private equity, private credit and private real estate funds. We partner with some of the largest and most respected private asset managers in the world. But we do so on better terms.

If you’re curious about private investments, please contact your Crown Personal CFO.