For Business Owners
Diversify Beyond Your Business
Your company pays you, holds most of your wealth and takes most of your week. Investing outside it can add a source of growth that doesn’t need your time.
If you own a business, your income, your net worth and probably your retirement plan all depend on the same company. Concentrating on your business is likely how you built your wealth in the first place, but keeping everything in one place carries real risk as markets evolve.
Most of an Owner’s Wealth Sits in One Place
The Exit Planning Institute has reported for years that the business typically makes up about 80% of an owner’s net worth.1 Spare cash goes back into the company, into new equipment or a second location, and that reinvestment is often what made the company valuable. For comparison, Fidelity suggests reexamining any single investment that makes up 5% or more of a portfolio.2
So one asset ends up paying your salary, holding most of your wealth and, for many owners, standing in for a retirement plan that a future sale is expected to fund. When your industry slows or a big customer leaves, your salary, your net worth and that retirement plan all take the hit together.
Enjoying This Article?
Sign up for Investor Insights to get real estate and mortgage note investing articles from the PPR team, plus invitations to investor events.
Diversifying Means Owning Things Your Business Doesn’t Drive
Spreading money across more stocks helps, but a recession can squeeze public companies and your own business at the same time. So owners often look for investments that don’t rise and fall with their customers or their local market, such as private fund investments.
Private real estate is one of the more common choices. It is tied to real property and can produce income, and some structures pass depreciation through to investors, which may help offset passive income depending on your tax situation. Private funds are also illiquid, often for several years, and every investment carries risk, including the loss of capital, so most owners treat them as one part of a broader plan.
A Planning Tip
Start by measuring the gap between what you want to have when you step away from the business and what you own outside it today. For many owners, the business is expected to close that gap on its own. Building wealth outside the company narrows it and leaves less riding on a single sale.
A Family of Funds, from Debt to Equity
PPR Capital Management offers four funds that provide exposure to real estate across the spectrum, from residential mortgage notes on the debt side to build-to-rent communities and operating businesses on the equity side. Investors can hold more than one, choosing a mix that fits their own risk tolerance, return goals and retirement time horizon.
From debt (top) to equity (bottom)
Mortgage notes
PPR Cornerstone Fund
Buys non-performing residential mortgages at a discount and works each loan toward resolution.
View the fund →Build-to-rent + mortgage notes
PPR Capital Foundation Fund
Provides exposure to build-to-rent communities and non-performing residential mortgages.
View the fund →Build-to-rent
PPR Keystone Housing Growth Fund
Holds build-to-rent communities across ten target markets, from Dallas to Philadelphia.
View the fund →Operating business
PPR Opportunity Fund II*
Owns express car wash properties, an asset type where much of the cost sits on short depreciation schedules.
View the fund →*Opportunity Fund II is available to qualified purchasers only.
Mortgage notes and rental housing depend on different things than a machine shop or a dental practice does. Opportunity Fund II’s car wash properties are themselves operating businesses, which may make that strategy easy for an owner to evaluate.
Who Can Invest, and How to Tell If You Qualify
PPR’s funds are private placements offered to accredited investors under SEC Rule 506(c), and every investor’s accredited status is verified before they invest. The SEC defines an accredited individual in a few ways.3
The Income Test
Over $200,000 a year, or $300,000 with a spouse
How It Works
You earned more than $200,000 in each of the past two years, or more than $300,000 together with a spouse or spousal equivalent, and you expect the same this year.
The Net Worth Test
Over $1 million, not counting your home
How It Works
Your net worth is over $1 million, alone or with a spouse or spousal equivalent, not counting your primary residence.
Professional Licenses
Series 7, 65 or 82 in good standing
How It Works
Holders in good standing of the Series 7, 65 or 82 licenses qualify on that basis alone.
If you have opted to reinvest in the company with a limited personal income, you may miss the income test and still pass the net worth test. Your share of the business counts as an asset, along with your other holdings, minus what you owe. Your CPA or attorney can confirm where you stand.
Opportunity Fund II has a higher bar. It is open only to qualified purchasers, which for an individual generally means owning at least $5 million in investments.4
Curious If You Meet the Qualified Purchaser Requirement?
Our guide walks through how the $5 million investment threshold works, what counts toward it and how it differs from accredited investor status.
Read: What Is a Qualified Purchaser? →If You Don’t Qualify Yet
You can still prepare. Get a current valuation of your business, work out how much cash the company needs and how much you could invest, and ask your advisors how a future sale or recapitalization would change your numbers. Our Resources Center has primers on depreciation and private real estate funds you can read in the meantime.
Commonly Asked Questions
What Should I Consider Before Moving Money Out of My Business?
That decision depends on your situation and is one to make with your advisors. Common considerations include how much working capital and reserves the business needs, the tax cost of taking money out, and how much cash you want to keep on hand.
How Long Is My Money Committed?
Private funds are illiquid, and holding periods vary by fund. Each fund’s offering documents spell out the terms, and our Investor Relations team can walk you through them.
Can I Invest Through My Company or a Retirement Account?
Entities and some self-directed retirement accounts can invest if they meet the eligibility rules. The requirements differ, so confirm the details with your advisor and our team before you start.
Will This Lower My Taxes?
It depends on the fund and on you. Funds that hold property directly can pass depreciation through on a K-1, which may offset passive income. Whether you can use it depends on your own tax situation. This is not tax advice.
Do I Have to Choose Just One Fund?
No. You can hold more than one, for exposure to both debt and equity.
Start Before You Need It
Adding holdings outside your company is easier while the business is doing well and you have cash to spare. If you want to see what that could look like, start with our current offerings or schedule a call with our Investor Relations team.
Sources
1. Exit Planning Institute, 2023 National State of Owner Readiness Report, pp. 36–37 (“the business is on average 80% of the owner’s net worth”). exit-planning-institute.org
2. Fidelity Investments, “Do you hold too much in one investment?” (February 19, 2025). fidelity.com/learning-center/trading-investing/too-much-one-investment
3. U.S. Securities and Exchange Commission, “Accredited Investors” (Rule 501(a) of Regulation D). sec.gov/resources-small-businesses/capital-raising-building-blocks/accredited-investors; Investor.gov, “Updated Investor Bulletin: Accredited Investors.”
4. Investment Company Act of 1940, Section 2(a)(51), definition of “qualified purchaser.”
