Private Equity No Longer a Private Club

With four businesses under his belt, two of which he sold for megamillions, 33-year-old Michael Lazerow qualifies as a serial entrepreneur.

Therefore, he says, he's well positioned to invest in one of today's most coveted asset classes: private equity. It involves companies that seize other companies, spruce them up and (fingers crossed) sell them for a profit years later. The investment category regained its popularity in 2006 when there were more than 1,000 announced private-equity deals in the U.S.

"Most of the money is made in finding the right deal," says Lazerow, whose newest venture, Buddy Media, is a New York City application development firm that serves social networking Web sites. "It helps if you have experience in the industry you [invest in]."

While Lazerow makes it seem accessible, private equity has traditionally been, well, private. Its participants include mostly accredited (i.e., more than $1 million in the bank) and in-the-know individuals, as well as institutional investors, pension plans and university endowments with thousands if not millions to offer. In the past three years, Lazerow has bet on eight deals from $100,000 to $150,000 each.

Don't Have Millions?

Good news: The members-only asset club has opened its doors -- albeit ajar -- to include investors who don't need to be accredited and who don't want their money locked in for years. In July, Vista Research and Management issued (LPEAX Quote)The Listed Private Equity Plus Fund, an open-end mutual fund that lets investors enter for as little as $1,000. Rating agencies Morningstar and Lipper track the fund.

"That's great news for us," says Steven Samson, the fund's chief investment officer. "As a mutual fund, it's important to build an investment record. It bodes well for this asset generation."