“With interest rates at their current levels, you naturally do not want to leave your capital sitting in the bank.”

You can diversify private equity investments much more widely, while at the same time staying closer to the action. In addition, you naturally continue to build your network. Historically, returns in the private equity world have also been genuinely interesting. If you are looking for a degree of certainty, the diversification of a fund-of-funds can help. It requires little involvement from your side, while giving you reasonable confidence that it will generate returns. After selling my company, I had financial resources available. With interest rates at their current levels, you naturally do not want to leave your capital sitting in the bank. You start exploring different possibilities. You do not want to put all your eggs in one basket. I placed part of my wealth with a wealth manager who invests it in equities. That feels very anonymous. Every now and then, you check what is there and how it is performing. It is actually quite boring. I also manage a portion myself and, if I am completely honest, they may be doing slightly better than I am.

For the Fund Investments proposition, BB Capital initially had to convince me. I actually considered a fund-of-funds to be too passive. So why did I decide to invest? Quite simply: diversification. A few million of my capital in a fund becomes part of a larger pool, which is then invested in a highly diversified way. This gives you reasonable confidence that you will achieve a market-average return. It is simply the law of large numbers. If the average market return is 13 percent and you are invested across three hundred companies, then it should work out. But if you are invested in only one or two companies and one of them goes bankrupt, you have a problem. In addition, BB Capital has developed a system whereby, at the moment they invest, a substantial part of the invested capital is in fact already deployed. So they do not have that very long ramp-up period. And that ultimately convinced me.

I mainly want to avoid drawing down on my capital. The challenge is to grow my wealth and use the returns to fund my lifestyle. I do not like the idea of leaving it in the bank and gradually spending part of it each year. At the same time, as your wealth grows, you increasingly start looking for certainty in your returns, rather than the highest possible return. To achieve that, you would have to take on much more risk. It would, of course, be a shame to invest a reasonable amount of wealth very riskily, only to have to tell your wife four years later that you need to sell the house.