Here are some diversification benefits of including private capital in an investment portfolio:

- Low correlation with public markets. Private capital investments often have a low correlation with traditional public market investments such as stocks and bonds. This means that their performance tends to be influenced by different factors, and they may not move in tandem with public market fluctuations. By adding private capital to a portfolio, investors can potentially reduce overall portfolio volatility and enhance risk-adjusted returns.

- Access to unique investment opportunities. Private capital investments provide access to unique investment opportunities that are not available in public markets. For example, investing in early-stage companies through venture capital can offer exposure to innovative technologies and high-growth potential that are not easily accessible through public stocks. This allows investors to diversify their portfolios by adding assets with different risk and return characteristics.

- Long-term investment horizon. Private capital investments typically have longer holding periods compared to public market investments. Private equity funds, for instance, often have a life cycle of several years. This longer time horizon can allow investors to take advantage of illiquidity premiums and generate higher returns over the long term. The ability to invest for the long term can provide diversification benefits by reducing the impact of short-term market fluctuations on the overall portfolio.

- Potential for higher returns. Private capital investments have the potential to generate attractive returns due to their exposure to non-publicly traded assets. Private equity, for example, has historically outperformed public equities over the long term. By including private capital in a portfolio, investors can potentially enhance overall portfolio returns and achieve better risk-adjusted performance.

It's important to note that investing in private capital carries its own set of risks, including illiquidity, limited transparency, and potential higher costs. Due diligence, expertise, and proper portfolio construction are essential when incorporating private capital into an investment strategy.