Seven questions that private equity investors ask when making investments

Both personal investing and PE investing force one to accept relatively concentrated portfolios, deal with significant information asymmetry, make medium-term decisions that are difficult to reverse

A series of large and bad personal investments can wipe out most of us. Think crypto currencies, structured products, peer-to-peer lending, and most angel investment opportunities. So, how can we avoid poor investment opportunities? There are several similarities between personal investing and private equity (PE) funds, which invest in unlisted mid-sized companies. PE investing techniques can provide some useful lessons.
 
Both personal investing and PE investing force one to accept relatively concentrated portfolios, deal with significant information asymmetry, and make medium-term decisions that are difficult to reverse. Mutual fund managers, on the other hand, can have relatively diversified portfolios.