Seven Questions to Ask When Considering Private Alternative Investments Over Public

Private alternatives have been gaining momentum in recent years, with more investors choosing to add them to their portfolios. The appeal reflects the space’s growing diversification benefits, potential for long-term growth, and customized opportunities beyond traditional stock and bond markets. As these investments become more accessible to Canadians, and increasingly used alongside public market strategies, it begs the question: should more of your hard-earned capital be invested into private alternatives versus public markets and what questions should be asked before investing?

What are private alternative investments?

Private alternative investments are assets that exist outside public exchanges and typically fall beyond traditional asset classes like stocks, bonds, or cash. These investments can take many forms—such as private equity, real estate, or private credit—and are generally designed to generate income, long-term capital appreciation, or both. They are often used to diversify portfolios and provide attractive opportunities that may not be available through traditional public markets.

Understanding the unique characteristic of private alternative investments is just the first step. To make informed decisions and assess whether these opportunities fit your portfolio, it’s important to ask the right questions. For clarity and consistency purposes, the examples used throughout this article focus on real estate investment trusts (REITs), in which Skyline is recognized as a market leader in Canada.

With that in mind, here are seven key questions to consider when evaluating private alternative investments:

1.Access and availability: Can everyday investors purchase private alternative assets?

For investors seeking private asset exposure, the most fundamental question is one of access and availability. After all, if you aren’t qualified to participate in the first place, every other step of the evaluation process becomes irrelevant. While private investments have historically had a higher bar to entry than their public counterparts, they are increasingly becoming accessible to a broader range of investors. For example, Skyline recently reduced its eligibility criteria to meet growing investor demand for private markets. Both accredited and eligible investors can invest with Skyline.

As per National Instrument 45-106, an individual may be deemed an accredited investor or eligible investor if they satisfy the following requirements:

2.Trading venue and liquidity: How can I invest in private alternative assets and how quickly can I sell or redeem them if needed?

Private investments work a little differently than public ones. Instead of being bought and sold on a stock exchange, they’re priced and managed directly by the fund itself. Because of this, they don’t trade as often and usually require you to stay invested for a longer period of time, with specific windows when you can sell.

So, what are your goals for wanting to invest in private markets? Maybe it’s saving for retirement, building generational wealth, or simply growing your money steadily over time. These investments are meant to be held long term, with the focus on steady wealth growth rather than quick access to cash. If you do require access to your investment capital, some funds, including those managed by Skyline, allow redemptions without charging exit fees.

3.Valuation: How can I properly determine the value of private investments

Valuing private investments follows many of the same principles as public markets, but the information is shared differently. Unlike public investments, where data is broadly published across financial platforms, private investment valuations are provided directly by the fund manager. This ensures investors receive accurate, fund-specific information, which can then be used to make peer comparisons and assess relative value.

When considering a private investment, it’s important to review the information made available online, like fund performance reports and annual or quarterly reports. You should also request any additional details you need to feel confident in your decision.

4.Regulation and transparency: What regulatory framework governs private investments in Canada, and how does it differ from public markets?

Private investments in Canada operate under the Exempt Market framework. Instead of going through the same full prospectus process as public securities, exemptions allow exempt market dealers (EMDs), such as Skyline Wealth Management, to offer investments to accredited or eligible investors who meet specific financial thresholds.

Although public markets are more heavily regulated, with issuers required to provide ongoing financial reporting, material disclosures, and corporate governance filings, private investments also follow strict securities laws and compliance requirements. Importantly, firms like Skyline Wealth Management have built a reputation for going above and beyond, offering clear, accessible reporting and direct communication through dedicated relationship managers.

When evaluating private investments, it’s wise for investors to consider not just the firm’s track record, but also how transparent each individual investment is—how information is shared, how performance is reported, and how easy it is to get answers to your questions.

5.Volatility: Do private investments experience the same level of volatility as public?

Although people sometimes think private investments are riskier and more volatile, some experts believe that hasn’t been the case. Since 2016, including the pandemic period, private markets have exhibited lower volatility compared with many leading public market benchmarks.

While the reasons for bigger market swings are debated, one surprising factor may actually be the ease of trading in public markets. Because you can sell instantly, investors often react emotionally during turbulent times, which can drive prices down faster and further than the fundamentals would suggest. It’s a paradox: the very thing that feels like a safety net—instant liquidity—can actually create more instability.

Private investments, on the other hand, don’t have that same “panic button.” This can help smooth out the ride, often making private risk-adjusted return alternatives more advantageous during periods of sharp ups and downs.

6.Minimum investment: Are there minimum monetary requirements to purchase private market investments?

Entering public markets often requires minimal capital, with some platforms offering fractional share purchases. Your main costs of entry are account opening minimums and fee structures related to management fees or trading commissions.

Private investments usually require a larger minimum amount to get started, but that higher bar comes with advantages. Investors gain access to professionally managed, institutional-quality opportunities that most people can’t get through public markets. These investments are actively managed by experts, designed to add diversification, and often aim for more stable, risk-adjusted returns over the long term.

Be sure to find out what the minimum investment is so you can determine if it’s right for you. For many investors, that higher minimum is the trade-off for accessing strategies that can complement, and potentially outperform, traditional public investments.

7.Return potential: Do private investments offer higher returns than public ones?

Private investments have a strong track record of delivering solid long-term returns, reflecting their higher risk profile, lower liquidity, and other factors previously outlined. The evidence is clear and compelling.

For example, between 2004 and 2023, U.S. private equity and venture capital generated more than double the returns of the S&P 500. It has also been documented that an equal-weight allocation to private alternative asset classes delivered returns about 4% per year higher than an equal-weight allocation to traditional public asset classes, excluding cash.

While all investments can fluctuate year to year, private opportunities can provide a way to diversify your portfolio, access institutional-quality strategies, and potentially grow wealth steadily over the long term. Working with the right experts can help you understand how these options fit your goals and risk tolerance.

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In the end, the importance of due diligence and asking the right questions are key to making smart private investment decisions. For those considering adding private investments to their portfolios, taking the time to understand the ins and outs can help you feel confident when stepping into new opportunities.

At Skyline, we understand that private investors want more than just access—they want clarity, guidance, and results. That’s why we prioritize transparency, personalized service, and a hands-on approach to help investors navigate private markets with confidence. Our carefully managed investment offerings have historically delivered strong annualized returns of 8–14%¹, providing the potential for meaningful long-term growth.

By combining disciplined strategy, experienced management, and a focus on delivering value, Skyline helps investors reach their long-term goals while providing confidence and guidance every step of the way.

¹ 8-14% annualized return figure is since funds’ inception. Full annualized return performance is as follows: Skyline Apartment REIT, 7.52% 1-year, 8.15% 3-year, 11.43% 5-year, 14.28% 10-year, 13.54% inception (June 1, 2006); Skyline Industrial REIT, 5.72% 1-year, 9.38% 3-year, 16.34% 5-year, 15.91% 10-year, 14.22% inception (January 10, 2012); Skyline Retail REIT, 8.28% 1-year, 7.78% 3-year, 10.24% 5-year, 12.39% 10-year, 11.80% inception (October 8, 2013); Skyline Clean Energy Fund, 8.95% 1-year, 9.41% 3-year, 9.35% 5-year, and 9.06% inception (May 3, 2018). Performance is for Class A of the funds and does not guarantee future results for Class F. All Skyline REIT’s figures as at June 30, 2025. Skyline Clean Energy Fund’s figures as at July 2, 2025.