Most traditional investments—such as stocks or bonds—are largely intangible. Even an equity share represents ownership in a company rather than a tangible object. Real assets, by contrast, are physical and derive their value from their inherent properties. Examples include real estate, infrastructure, and natural resources.
Investing in privately held real assets allows investors to earn returns from long-term leases, contractual income, or appreciation in asset value. These types of assets are gaining popularity among investors seeking diversification beyond the public markets, particularly those who want inflation protection and consistent income streams.
Key Highlights
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Private real estate and infrastructure often provide stable, inflation-linked income.
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These investments are typically illiquid but accessible via private funds or investment platforms.
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Real assets may deliver steady returns with lower volatility than stocks or bonds.
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Most private real asset investments require long holding periods.
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Real assets can strengthen portfolio diversification and hedge against market risk.
What Are Private Real Assets?
Private real assets are tangible investments not listed on public exchanges. Their value is tied to their physical characteristics and usage rather than market speculation. Because they are privately held, access is typically limited to specialized funds, partnerships, or dedicated investment platforms.
This lack of public trading makes these assets less liquid but potentially more resilient during public market downturns. The main categories of private real assets include:
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Private Real Estate: Non-publicly traded income-producing properties such as apartment complexes, industrial facilities, and student housing.
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Infrastructure: Long-term physical systems—roads, airports, utilities, energy pipelines—that provide essential services.
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Natural Resources: Timberland, farmland, water rights, and mineral or energy assets.
Investors usually access these assets through private equity-style funds, syndicates, or specialized investment vehicles.
Advantages and Risks of Private Real Assets
Potential Benefits
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Inflation Protection: Real assets often rise in value with inflation, as their income streams (like rent or usage fees) can adjust over time.
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Steady Income and Cash Flow: Many real assets produce consistent, long-term cash flows from leases or usage contracts.
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Diversification: Their performance is generally uncorrelated with public equity markets, providing a valuable hedge during volatility.
For example, an investment in toll roads or energy infrastructure may generate revenue through user fees or government-backed contracts—sources of income that are less sensitive to stock market fluctuations.
Key Considerations and Risks
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Illiquidity: These assets often have multi-year lock-up periods before investors can access their capital.
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High Minimum Investments: Many opportunities require substantial initial capital, making them less accessible to smaller investors.
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Accreditation Requirements: Some offerings are open only to accredited investors.
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Operational and Regulatory Risk: Real estate may face tenant turnover or maintenance issues, while infrastructure projects could be affected by policy changes or permitting delays.
Because these assets are often held for years, investors must be comfortable with limited liquidity and a long-term commitment.
How to Invest in Private Real Assets
1. Private Real Estate Funds and Syndications
Private Real Estate Investment Trusts (REITs) or syndicates pool investor capital to acquire and manage income-producing properties. Unlike publicly traded REITs, these vehicles operate in the private market and often require longer commitments.
2. Infrastructure Funds and Direct Investments
Dedicated infrastructure funds focus on projects such as renewable energy, utilities, and transportation. Some investors may participate directly in specific projects, although this usually requires large capital outlays and specialized expertise.
3. Natural Resource Investments
Investors can gain exposure to farmland, timberland, or mineral rights either through direct ownership or through partnerships with professional managers such as Timber Investment Management Organizations (TIMOs).
Popular Platforms for Private Real Asset Investing
Online platforms have made private markets more accessible, even to smaller investors. A few notable examples include:
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Fundrise: Offers diversified portfolios of private real estate and infrastructure assets.
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Yieldstreet: Provides access to private market investments traditionally reserved for institutional investors.
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AcreTrader: Specializes in farmland investments, managing the operational and administrative aspects on behalf of investors.
These platforms often have lower entry minimums than traditional funds, making them an appealing option for individuals seeking exposure to real assets.
Comparing Private vs. Public Real Estate
Public real estate investing typically involves buying shares in publicly traded REITs, which are liquid but subject to market volatility. Private real estate, by contrast, involves direct ownership or investment through private partnerships. While less liquid, private real estate tends to exhibit lower price volatility and may provide more predictable income streams.
Evaluating Infrastructure Opportunities
When assessing infrastructure investments, investors should consider factors such as:
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The project’s stage of development (greenfield vs. operational)
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Expected maintenance and operating costs
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The source and reliability of cash flow
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Potential regulatory or political risks
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Demand and usage volume
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Fit within the overall portfolio and risk tolerance
Investment Horizon and Liquidity
Private real asset investments usually involve long holding periods—often five to ten years or more. The timeline depends on the asset type and fund structure, but investors should be prepared to commit their capital for the long term.
The Bottom Line
Private real assets—including real estate, infrastructure, and natural resources—can offer stable income, inflation protection, and meaningful diversification. While they come with challenges such as illiquidity and high entry thresholds, these investments can strengthen a long-term portfolio when accessed through the right platforms or funds.
For investors looking to move beyond traditional stocks and bonds, private real assets provide a tangible, durable foundation for long-term wealth building.
Frequently Asked Questions (FAQ)
1. What are private real assets?
Private real assets are tangible investments—such as real estate, infrastructure, and natural resources—that are not traded on public markets. Their value comes from the underlying physical properties and long-term income potential.
2. How can investors access private real assets?
Most investors gain access through private funds, syndicates, or online investment platforms. Examples include private REITs, infrastructure funds, or farmland platforms like AcreTrader.
3. Are private real asset investments risky?
Yes, they involve certain risks such as illiquidity, regulatory changes, or operational issues. However, they often provide diversification benefits and protection against inflation.
4. How long is the typical holding period for private assets?
The holding period can range from 5 to 10 years or more, depending on the investment structure. Investors should be prepared for limited liquidity during this time.
5. What are the benefits of investing in private real estate or infrastructure?
These assets can offer long-term, inflation-linked income, steady cash flow, and reduced volatility compared to public equities or bonds.
6. Who can invest in private real assets?
Some opportunities are open only to accredited investors, but new investment platforms have made certain real asset investments accessible to individual investors as well.
7. How do private real assets help with inflation protection?
Because their income streams—like rent or usage fees—can adjust with inflation, real assets often maintain or increase in value as prices rise.