Carofin: Important Personal Considerations in Private Placements

Carofin, a leading institution in direct private investments, sheds light on personal factors which should influence investors’ decisions about investing directly in private companies.  In a recent interview, Matt  Brown spoke with experts Garrick Ruiz and Nash Roberts, who shared their insights on what investors should consider when evaluating private investment opportunities.

Garrick Ruiz, responsible for private investor sales and syndication, walks prospective investors through the nuances of each investment offering, providing them with accurate information to make informed  decisions.  Nash Roberts, VP of Sales and Syndication, focuses on broadening the network of individual accredited investors and family offices interested in direct private investments.

Understanding Investor Suitability

There are many factors that play a role in determining whether an investment is suitable.  For instance, before an investor decides to move forward, Nash emphasizes how important it is to understand an investor’s personal investment considerations and risk tolerance.  He suggests placing smaller amounts, especially for first-time direct private investors, to help become acquainted with how they work and to place less  money at risk until they are comfortable with the risks involved.

Quote: “Invest less than you want to as a starting place, even if it’s a hot new deal. Because, as we all know, there’s a lot of hype in the private capital markets.  We want to make sure that you’re comfortable making an investment and you understand the risks that are inherent to direct private investment.” – Nash Roberts

Factors Affecting Investment Size

According to Garrick, considerations such as an investor’s needs, risk tolerance, investment experience, and existing portfolio play a significant role in determining both the size of investment they might make, but also the percentage that private investments comprise within their overall portfolio.  While there are exceptions, investors typically allocate between 10% and 20% of their overall portfolio to direct private  investments.

Cautioning Overly Enthusiastic Investors

Garrick often advises investors to be cautious, especially if they are considering a disproportionately large allocation to a single investment opportunity.  The goals are to create diversity, dampen the impact of any one badly performing private placement and to counterbalance public market volatility.

Quote: “The more diverse any particular portfolio is, the smoother those investment returns will be over time, if any particular given investment goes through a rough patch … or amendments are required.” – Garrick Ruiz

Investor Considerations

Nash highlights the importance of considering an investor’s age, investment objectives, and time horizon when advising on suitable opportunities.  For instance, retirees should be cautious when investing in venture-stage businesses, as these investments are likely to take longer to produce positive results (if at all), and their risk profile is higher than with later-stage company investments.  To read more related  material, see Why Invest in Alternative Investments: Here are 3 Reasons here.

Tax Implications

Garrick emphasizes that, while tax status plays a role in investment considerations, it’s crucial to consult with tax professionals or CPAs for specific advice.


Carofin’s experts recommend investors carefully consider whether private investments are suitable in respect to their risk profile, liquidity needs, time horizon and age, portfolio diversification, and more.  If they do decide to move forward, do so cautiously and in increments that will not affect their lifestyle if one or more do not perform as hoped.

Watch the full episode here and, if you need help choosing direct private investments, Carofin will light the path here.

Photo by Josh Boot on Unsplash





In the interest of accessibility, here are some terms that any investor should be familiary with.