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  5. BN: What would be your general guidelines in investing in private equity and private credit. [Brookfield Corporation Class A Limited Voting Shares]
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Q: What would be your general guidelines in investing in private equity and private credit. And/or, if the question exceeds the scope of this plateform or expertise please refer to sites or books that could be of interest.

Thank you for your excellent expertise
Asked by Jean on October 08, 2025
5i Research Answer:

We would be quite cautious with private credit. Essentially, investors are taking the full risk that managers can source and price credit. There are often liquidity issues. In addition to full-on scams such as Bridging Finance, many private credit funds have recently been 'gated' due to high redemptions and low liquidity. For us, the extra 1% to 3% is simply not worth the risk, especially when looking at very weak liquidity (generally) in private credit. Another issue is that since demand has increased (more money in the sector), pricing has become less profitable for managers, and many are stretching their credit quality to find deals. 

Private equity is somewhat different. There are some of the same issues but potential gains are far higher so the risk is at least offset. There are lots of public entities that focus on private equity, such as KKR and BN, and this allows liquidity for investors through a public company. There are also ETFs focused on the private market.  Investing in privates oneself is riskier, of course, but can be very beneficial. Deals can be very hard to access, however, on an individual level. There are many books on the subject on Amazon but we have not read these so can't review them. Here is a free general guide.