Diversification with private assets: how many projects is enough.

"Don't put all your eggs in one basket" is easy advice to give and surprisingly hard to follow when the baskets are yachts, restaurants and commercial units rather than stocks. Here is how to think about diversification with private, shared-ownership assets.

Diversification is not about owning many things — it is about owning things that behave differently from each other. Two restaurants in the same neighbourhood are not diversified. A restaurant, an office unit and a yacht charter asset might be, because their income drivers are different.

What diversification actually buys you

Private assets carry a risk you cannot diversify away easily: concentration. If you own a fraction of one yacht, your return depends on one hull, one operator and one charter market. Adding more projects does not guarantee better returns — but it reduces the chance that a single bad outcome defines your whole portfolio. That is the entire point: diversification is about narrowing the range of bad outcomes, not raising the average.

How many projects is enough?

There is no magic number, but a few practical rules help:

• Start with three to five. Below three, one failure dominates your portfolio. Above five, most small investors spread themselves too thin to follow each project properly.
• Diversify across asset types. Mix property, hospitality and charter or logistics assets so a slowdown in one sector does not hit everything at once.
• Diversify across operators. In hospitality and charter, the operator matters as much as the asset. Two projects run by the same operator share the same management risk.
• Diversify across timelines. Projects at different stages — one funding, one operating, one approaching exit — smooth out your cash flow and your decisions.

The mistakes to avoid

1. Mistaking quantity for diversity. Five offices in the same tower is one bet, repeated five times.
2. Over-diversifying too early. Tiny fractions of twelve projects means twelve sets of reports to read and no meaningful position in any of them. Depth matters as much as breadth.
3. Ignoring correlation in a downturn. In a genuine market shock, many asset types fall together. Diversification softens the blow; it does not make you immune.
4. Forgetting your cash buffer. Private assets are illiquid. Diversification never replaces an emergency fund — money you might need soon should not be in locked-up projects at all.

The honest framing: diversification is a discipline, not a product feature. A good platform can give you the menu — different assets, different operators, different timelines. Building the portfolio that fits your risk tolerance is your job, and taking the time to write down why you chose each project is the simplest version of an investment thesis that works.

Capital at risk. Educational content, not financial advice.