What Is a Private Placement and What Are Some Examples?
A private placement is a security that's sold to an investor.
Some common examples of private placements include:
- Real Estate Investment Trusts (REITs)
- Non-Traded REITs
- Hedge Funds
- Equipment Leasing Agreements
- Various oil and gas limited partnerships
A private placement is a security that's sold to an investor that is not a registered security. When there is not a registered security, it doesn't have the protections where certain disclosures have already been made and embedded to the investing public. Private placements are by their nature, high risk investments and only appropriate for very sophisticated investors, the investors who are able to evaluate the company’s specific risks of the investment and who are potentially willing to hold the investment for a very long time indefinitely as most private placements don't have a market and the investor will not be able to get out of the investment.
If you've been sold a private placement investment and have concerns whether it was appropriate for you, or whether the appropriate disclosures were made to you concerning that investment, please contact our law firm Shepherd, Smith, Edwards & Kantas where we'll discuss the investment with you on a free consultation basis to help you determine whether or not you should have been sold that investment.