What can be done to help the American workforce to prepare for retirement? With more than 52% feeling they are behind in their savings, it is estimated that there is a $4 trillion gap between what American workers need for their golden years and what they actually have in their bank accounts. While the ground cannot be made up quickly, of course, there are solid options for those getting a late start on their retirement savings. Traditionally, employees have relied on their 401k, whose average rate of return over the past three years has been between 9.7-15.1%, and on Roth IRAs, which typically earn 7-10%. Both remain viable alternatives for investors, but private equity firms like Hedgehog Investments, co-founded by Matt Bates and Josh Bishop, are providing a third choice: the ability to loan their money to business owners that are rebuilding their credit, restructuring debt, and growing their companies. The option, Hedgehog Investments says, has the potential to provide returns as high as 20% for investors and to help businesses to receive the capital they need.
The Problem of Capital Faced By Some American Businesses
Hedgehog Investments states that in 2022, the need for corporate capital will be at a historic high due to the economic fallout from the pandemic and global recession. One study published in the Wall Street Journal found that while roughly 600,000 businesses fail each year in the United States, the pandemic resulted in 200,000 additional closures, which does not include those that are still open but struggling. Additionally, a 2021 poll conducted by the Lake Research Partners for Small Business Majority stated that approximately 40% of small business owners have not been able to obtain any capital. Without it, more companies, then, face the threat of permanent closures and layoffs of their employees.
Private Equity Funds: The Potential to Help with Both Issues
Hedgehog Investments believes that one way more people can save for retirement while also helping companies to recover is for investors to pass or place their money in insured trust accounts with private equity companies that then loan it to businesses.
“It has the ability to basically kill two birds with one stone, as the saying goes,” says Matt and Josh. “Equity funds are not for getting rich overnight, obviously – nothing is. However, they do have the potential to provide higher rates of return than do other traditional investment options and are serving an even bigger purpose by helping businesses rebuild.”
How Hedgehog Investments Is Helping Its Partners and Businesses
The company explains that the model it uses is designed to bring the highest possible returns to its partners and to support businesses they believe will successfully complete the process.
“We work with Princeton Law Firm, a company with over 25 years of experience in this market, to carefully evaluate companies that are ready to take their businesses to the next level,” Hedgehog Investments says. “The money is used to pay down their debt-to-income ratios so that they can secure long-term financing.”
Investors, the other side of the equation, are given one-year contracts that insure both the principal and interest. Once the contract matures, the individual’s interest is due.
About Hedgehog Investments Holdings
Hedgehog and its co-founders have more than 25 years of experience with corporate credit building, small business capital, and public and private acquisitions and investments. They created Hedgehog Investments because they thought others deserved to have the same returns on their investments that they had. Hedgehog and its staff believe that it should be easier to find high returns on investments and that financial partnerships should involve strong relationships and genuine trust. “We are especially excited about our services because we believe in 2022, we and our partners will be able to provide $100M of growth capital for small businesses,” they say.
The Outlook for Companies and Future Retirees
Private equity firms have the potential to ultimately assist with two issues facing our country today: a workforce that is not prepared for retirement and businesses that lack the capital they need to operate. By thinking outside of the box, Hedgehog Investments may have the model we need to address both problems more successfully.
For more information on Hedgehog Investments, please visit their website or contact them at:
Phone: (480) 204-8446
SOURCE: Hedgehog Investments