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Should you invest in the assets or the asset manager

MarkMark
edited November 2023 in Other Investing
Summary

° Asset management is a cash-minting machine of an industry with infinite growth capabilities. But, there's a catch.
° BlackRock and Vanguard have destroyed the traditional mutual fund industry, and now there is only one place left with fat fees.
° Alternative asset management is a $20 trillion industry, growing at 35% and charging about 5X higher fees than BlackRock or Vanguard.
° Management teams consistently earn $60 to $600 million per year and are worth it, generating Buffett-like 20% returns for investors over the last decade.
° Blackstone Inc. is the king of alternative assets with $1 trillion in assets, and Apollo Global Management, Inc. is #3 and the king of private credit. One of these is currently a good buy and capable of 4X the short-term returns of the other.

A SeekingAlpha article HERE

Comments

  • Devo
    Really divided on this. I am more confident these managers can tell the story to fund investors and stock investors than generate 20% returns going forward. Rates are high, leverage is difficult, and though they will find occasional elephants, everyone knows the tricks. Yet, they have done a fantastic job convincing pension funds on one side and buying insurance companies (and their retail deposits) on the other side to get equity capital and debt capital respectively. But I still have doubt on 20% returns. Even Buffett cannot do it.
  • WABACWABAC
    Devo said:

    and buying insurance companies (and their retail deposits) on the other side to get equity capital and debt capital respectively. But I still have doubt on 20% returns. Even Buffett cannot do it.

    That's unsettling.

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