Retirement funds, endowment funds, pension funds…yes they all have PE exposure. I left finance nearly ten years ago, but as far as I know, the closest an individual investor could get to exposure to accredited investor-like investments privately is through 1974 Act funds made to echo the private funds trades. I only saw hedge funds creating parallel funds like this for retail investors given that the underlying investments are public. I don’t know of any way for an individual who isn’t an AI to get true private equity (non-public) deal exposure directly themselves. You clearly are up to speed on things, has this changed in the last few years?
Things have gotten a lot worse in recent years due to the search for yield. Private equity players have the luxury of doing creative valuations with their holdings. They do not necessarily have to mark to market since their holdings are not publicly quoted. So they can show their investors steady and healthy returns in an ultra low interest rate environment like we’ve had until recently. With the interest rates climbing back up and a lot of their financing coming to maturity over the next few years, we might end up seeing a lot of these guys were swimming naked.
Count on it, they can’t help themselves. If Mark McGuire is juiced to the tits and hitting grand slams, Barry Bonds will also get on the juice. Same goes with investment performance. They all get over their heads in leverage every time.
Correct, however, she said 401ks specifically.
Retirement funds, endowment funds, pension funds…yes they all have PE exposure. I left finance nearly ten years ago, but as far as I know, the closest an individual investor could get to exposure to accredited investor-like investments privately is through 1974 Act funds made to echo the private funds trades. I only saw hedge funds creating parallel funds like this for retail investors given that the underlying investments are public. I don’t know of any way for an individual who isn’t an AI to get true private equity (non-public) deal exposure directly themselves. You clearly are up to speed on things, has this changed in the last few years?
Things have gotten a lot worse in recent years due to the search for yield. Private equity players have the luxury of doing creative valuations with their holdings. They do not necessarily have to mark to market since their holdings are not publicly quoted. So they can show their investors steady and healthy returns in an ultra low interest rate environment like we’ve had until recently. With the interest rates climbing back up and a lot of their financing coming to maturity over the next few years, we might end up seeing a lot of these guys were swimming naked.
Count on it, they can’t help themselves. If Mark McGuire is juiced to the tits and hitting grand slams, Barry Bonds will also get on the juice. Same goes with investment performance. They all get over their heads in leverage every time.