Private equity for retail: Just because you can do it, doesn't mean you should

IN the current era of ultra-low risk-free rates of return, the financial innovation challenge of the day seems to be figuring out how to give retail investors access to the sweet returns of private equity.

But some of the recent attempts to do so seem to be fundamentally flawed, which raises the question of whether they are really worth the trouble.

On a risk-adjusted basis, high returns have been hard to come by ever since central banks slashed interest rates in response to the Global Financial Crisis. With government bonds setting the yield benchmarks at historically low levels, investors have had to take on more risk to get more out of their investments.