Straight talk on private equity’s risks and rewards

Scott Voss, managing director and senior marketing strategist at HarbourVest, joins the podcast to help bring clarity to the complex world of private equity. Describing private equity as “value-added capital,” he emphasizes that investors in this space do more than provide funding—they actively help shape the company’s governance, strategy, and growth trajectory.

“Instead of just taking an economic interest in the company, the investor is also playing a role in the day-to-day operations,” Voss says. He notes that private markets represent a significant opportunity, with less than 5% of companies publicly traded, making private equity one way to access the broader market.

Voss cautions that private equity isn’t a starting point for most investors. Instead, he recommends an allocation to private equity of about 10% to 15% as a complement to a well-diversified public portfolio. “You shouldn’t invest in something that you don’t understand,” he says, stressing the importance of education, patience, and a tolerance for illiquidity.

For those considering private equity, Voss’s guidance is straightforward: Be thoughtful, rely on proven frameworks, and approach the asset class with both optimism and caution. As with any investment, an understanding of the opportunities and risks is essential.