direct investing

Direct investing ⇒ refers to an investor that purchases assets itself, rather than pooling its funds with others or using a specialized outside manager. Larger, more knowledgeable investors may purchase private companies or real estate on their own. For example, a sovereign wealth fund may have its own specialized managers to invest in real estate, agricultural land, or companies in the venture stage.

Direct investing has advantages in that there are no fees to outside managers and the investor has more choice and control over the investments made. Disadvantages include the possibility of less diversification across investments, higher minimum investment amounts, and greater investor expertise required to evaluate deals and do their own due diligence.