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Thursday, June 11, 2015

Should Physicians Invest in Private Placements to Diversify Portfolio?


As an investment banker that specializes in the healthcare industry and who has consulted with over a thousand physicians, I can understand their apprehension when it comes to investing in opportunities that are not generally available to the public, in this case private placements. The notion of investing in an opportunity that seems “exclusive” with the potential for extraordinary returns can lead someone to believe that if it sounds to good to be true then it must be, particularly among physicians who are used to being courted all the time by third parties interested in their business.

However, while it is necessary for anyone who is considering investing in a private placement to conduct a thorough due diligence on the offering, I also think that physicians who qualify as accredited investors shouldn’t discount private placements as a viable way to diversify their portfolios, particularly if its in an area in which they may have some knowledge or professional interest in such as medical device companies or bio-techs that are starting up or looking to grow and require capital. My feeling is that if a physician were presented with an investment opportunity in a business with which they can relate to, they may be more inclined to take on some risks if doing so meant bringing to market a product or service that could benefit their patients or the healthcare community at large, while providing a nice return on their investment.

Here is a link to an interesting article on Using Private Placements As a Component of Your IRA Portfolio...

http://offerboard.azurewebsites.net/using-private-placements-as-a-component-of-your-ira-portfolio/


 

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