Putting your money into the market has long been part of your financial growth strategy. You’ve worked with financial advisors to create a diversified portfolio that aligns with your risk tolerance, and you make investment decisions based on years of experience.
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But you’re not a billionaire — at least not yet — and one area of investing has remained frustratingly out of reach: private equity.
You’re drawn to the potential for higher long-term returns, portfolio diversification, and access to promising growth-stage companies. But you’ve probably heard that private equity is only accessible to industry giants or individuals whose net worth could be an industry.
That’s starting to change. According to Christopher Zook, founder, chairman, and chief investment officer of CAZ Investments, private equity is becoming more accessible to everyday investors. He spoke with GOBankingRates as part of our Top 100 Money Experts series to share how the door is opening — and what you should know before stepping through it.
The Old Approaches Are Shifting
As an investor, you already know it’s easy to trade stocks on public exchanges. Private equity, by contrast, involves privately held assets that aren’t as liquid — and this is by design.
“Anyone who has ever owned a home has invested in a private asset, and they know they cannot just sell it on an exchange,” Zook explained.
Privately held assets are similarly locked up. “This lack of liquidity naturally leads to longer expected hold periods, as the assets must be sold in a private transaction,” said Zook. “But that is also where the opportunity is, as investors will demand higher returns in order to give up their liquidity.”
While you may understand how private equity works, knowledge alone doesn’t grant access. But Zook thinks that could be changing, thanks to regulatory reforms and innovative investment structures.
“Perhaps more importantly, recent SEC regulatory changes have dramatically broadened investor eligibility for private markets,” Zook said. “As a result, everyday investors can now tap into the opportunities and benefits that were once reserved for only the world’s largest investors.”
New vehicles are helping to bridge that gap.
“Investors now have multiple ways to access private markets traditionally unavailable to them, in structures that offer various forms of liquidity, via registered funds and other mechanisms,” he added.
In a significant development, President Trump signed an executive order in August 2025 directing federal agencies to facilitate access to private equity and other alternative assets in 401(k) plans. While the order signals strong regulatory support, implementation is expected to take 12 to 24 months as agencies develop new rules and employers conduct the required due diligence.
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Weigh the Costs and the Benefits
Seeing the door to access open, even just a crack, might tempt you to jump in — especially when the returns look this good.
According to Zook’s analysis, “Private equity has historically outperformed public markets by over 500 basis points per year, and over long-term time horizons, this edge compounds powerfully.”
He offered this striking comparison: “Global equities have generated an 8.5% annualized return since 1986, which means that $1 million invested then would be worth over $22 million today. Global private equity, on the other hand, has generated 15.8% annualized returns over the same time period, which means that same $1 million invested would be worth over $292 million today.”
But with those rewards come some very real risks.
“There’s a reason why the best performing institutional investors typically have 25-30% allocations to private market alternatives,” Zook said. “Additionally, private markets can provide investors with crucial portfolio diversification, providing potential downside protection and lower correlation to most public investment portfolios, while providing the opportunity for higher returns.”
Still, Zook emphasized the importance of being selective.
“Unlike public markets, which tend to be highly efficient, private markets investments show a wide dispersion of returns between top and bottom performers, making manager selection critical,” he said.
And going it alone? Zook recommends against it.
“The asset class can be complex and difficult for inexperienced individuals to navigate on their own,” he explained. “Investors should seek to partner with experienced managers who have decades of experience, proven track records and significant alignment.”
Choose the Right Team
Though there are pivotal differences between public and private assets, they do have one thing in common: They each offer a full spectrum of risk. Zook emphasized that “private assets have a full range of risk profiles, from very, very risky to extremely safe.”
Time horizons also vary widely, from quarterly liquidity to decade-long lockups.
“The return profile can be just as varied,” Zook shared, “with slow and steady returns for some investments, and eye-popping wealth created from some of the most well-known success stories, like Amazon or Apple, both of which were private companies for several years before they became available to purchase on an exchange.”
That’s a lot of pressure. To navigate that variability, Zook says you want the best team possible in your corner.
“Winning in the private markets depends on accessing quality managers, understanding incentives and matching investments to your specific needs,” Zook said. “Most importantly, alignment of interest is crucial. You want partners who invest alongside you.”
He reminds investors that ultimately, investing is about people.
“The smartest approach for new investors is to find experienced partners who are significantly aligned with you, and who can give you curated access to unique investment opportunities.”
Bottom Line
Private equity is no longer just for the ultra-wealthy. With the Trump administration’s August 2025 executive order on 401(k) access, expanded SEC guidance on retail participation, and new registered fund structures, more investors are beginning to unlock this once-exclusive corner of the market.
The potential upside is significant — but so are the risks. As with any long-term investment strategy, do your homework, be intentional, and most importantly, find the right team to guide you through this evolving landscape.
This article is part of GOBankingRates’ Top 100 Money Experts series, where we spotlight expert answers to the biggest financial questions Americans are asking. Have a question of your own? Share it on our hub — and you’ll be entered for a chance to win $500.
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This article originally appeared on GOBankingRates.com: I’m an Investing Pro: Here’s How To Access Private Equity (Without Being a Billionaire)
