7 Rules for Picking the Ultimate "Secret Wealth" Investment

It's over.

Gov. Mitt Romney did not win the presidential election. A majority of Americans, in the final accounting, chose to support another political vision.

Time will tell how that turns out.

I don't do political commentary. But... Whatever Romney's politics, it's accepted as fact that Mitt's business acumen is almost unfailingly spot-on. The methods he used at Bain Capital to build his fortune are indisputable, and he has 250 million ways to support that argument.

Your ticket to a hidden world
Now, to get in on private equity like Bain Capital, you either need to have a liquid net worth of more than $2 million, excluding your house, and a very cushy salary. That's what federal law says. In practice, most "relationships" with private equity are in the $5 million range, though there are plenty of larger funds that aren't likely to return your call if that's all you have to invest. If you're not super-rich -- a movie star, sports star or captain of industry -- the rarified world is altogether off-limits.

The reality is, publicly-traded private equity firms and a special class of securities called business development companies (BDCs) are the only way most of us are going to get in on these deals. They lend to and buy pieces of small "middle market" private companies. The gains they can realize are stratospheric -- ten-baggers are commonplace in the private equity and BDC world.(more)

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