Foundations

Public investments are the familiar kind: shares and funds that trade on stock exchanges. Anyone can buy them, prices update by the second, and the companies behind them must publish detailed, audited information on a strict schedule.

Private investments are everything sold outside the exchanges. A company raising money directly from investors. A fund that buys apartment buildings. A pool that lends to businesses. There is no ticker, no live price, and much less mandatory disclosure — which is precisely why the law restricts who these can be sold to and how.

“Alternative” is a broader umbrella: anything outside conventional stocks, bonds and cash. It includes most private investments plus things like commodities, futures strategies, and crypto assets. The two words overlap heavily and are often used interchangeably in marketing — this site treats them together.

One important reframing: private does not mean exclusive-therefore-better, and alternative does not mean advanced-therefore-smarter. These are simply different legal structures with different trade-offs. The rest of this topic explains those trade-offs.

Liquidity — can you get out?

A public stock can usually be sold in seconds. A private investment often cannot be sold at all for years. Some funds allow redemptions monthly or quarterly, often with notice periods and the right to pause redemptions entirely in stressed markets. Some deals return money only when a building sells or a loan matures.

Pricing — what is it worth today?

Public prices are set continuously by thousands of buyers and sellers. Private valuations are estimates, prepared by or for the manager, updated perhaps monthly or quarterly. A smooth-looking chart of a private fund's value partly reflects the fact that nobody is repricing it every day.

Disclosure — what must they tell you?

Public issuers file audited financials, management discussion, and material-change reports that anyone can read. Private issuers may provide an offering memorandum and periodic statements — meaningful, but thinner, less standardized, and not always audited.

Oversight — who is watching?

Both worlds are regulated, but differently. Public markets are watched at the product level; the private markets are regulated mostly at the firm level — which is why checking a firm's registration matters so much more here. That's what the directory is for.

A security is the legal wrapper around an investment — a share, a bond, a fund unit, a limited-partnership interest. If you're being offered a piece of something with the expectation of profit from others' efforts, you're almost certainly being offered a security, and securities law applies.

A fund pools many investors' money to buy a portfolio of things. In the private world you'll meet limited partnerships (LPs) run by a general partner (GP), trusts, and corporations. The structure determines your rights, your taxes, and who owes duties to whom — it's not boilerplate.

A distribution is the legal word for selling securities to investors. Every distribution in Canada must either come with a prospectus — the full public-offering disclosure document — or fit within a prospectus exemption. That single sentence is the skeleton key to this entire market: the “exempt market” is just the set of sales made under those exemptions.

Three roles appear in nearly every deal: the issuer (the company or fund raising money), the dealer (the registered firm selling it to you), and — for funds — the manager (the registered firm operating it). Sometimes one firm wears multiple hats; the offering documents must say so.

Because exempt-market investments carry less disclosure and less liquidity, securities law limits who they can be sold to. The limits aren't about wealth as virtue — they're a rough proxy for either the capacity to absorb a total loss or the capacity to evaluate the deal.

The main doors into the exempt market, at a glance — each has its own chapter in The Exemptions:

• Accredited investor — meet income or asset thresholds, and most offerings open to you.
• Offering memorandum — receive a prescribed disclosure document; most people face caps on how much they can invest per year.
• Family, friends and business associates — a genuine close relationship with the issuer's principals.
• Minimum amount — invest $150,000+ in one go (non-individuals only in most provinces).
• Crowdfunding — small amounts through a registered funding portal.

The rules differ meaningfully by province — an offering structured for Alberta may work differently in Ontario. That's why a firm's registered jurisdictions, shown on every card in our directory, are worth a glance before anything else.

Understanding the path your money takes makes many risks visible. A typical exempt-market purchase looks like this:

• You complete a subscription agreement (your formal offer to buy) and any required risk acknowledgement forms.
• The dealer performs its know-your-client and suitability obligations — real regulatory duties, not paperwork theatre.
• Your funds go to the issuer or its custodian; you receive units or shares, recorded on a register (there's rarely a certificate to hold).
• Reports arrive on the schedule the offering documents promised; distributions, if any, follow the deal's terms.
• Exit happens by redemption, maturity, sale of the underlying assets, or — rarely — finding another buyer privately.

Two questions to ask about any deal's plumbing: who actually holds the assets (a custodian? the issuer itself?), and who checks the numbers (an auditor? which one?). Weakness in either is where a striking share of real-world investor harm begins.

Before evaluating any specific investment, settle these with yourself:

• Could I lose all of this money without changing my life? Exempt-market losses are usually total when they happen, not partial.
• When will I need this money back? If the honest answer is “within five years,” most of this market is a poor fit.
• Do I understand what the investment actually does? Not the pitch — the mechanism. If you can't explain how it earns money, you can't evaluate it.
• Who is on the other side, and are they registered? Ten minutes on the directory and the regulator's own search answers this. The verification walkthrough is here.
• Why me? Genuinely attractive private deals rarely need to hunt for strangers' money. An honest answer to this question is revealing in both directions.

With those settled, continue to Registration & the Rules — who's allowed to sell and manage these investments — or jump to Risks & Costs if you want the cold water first.