I have always been intrigued by how private equity ever got labeled as an “alternative investment”, let alone a “diversifying” alternative investment. I get the core concept, and understand the attraction. One acquires shares in privately held companies through a non-public transaction, where the goal is a resale of the company to another company or cashing out through an IPO. And there are certainly merits as an investment. PE funds offer a way to invest in private small cap companies, levering an informational edge while avoiding both the volatility and “quarterly earnings” obsession of public companies.