rarely have a read a better, scarier, brief. it is crypto-like in a guaranteed broader collapse.
"...top quartile [private] funds typically don’t return capital for over 15years...
[and retail will pick the winners and hold 100X longer than their typical trade, right?]
Why do you think the White House put out an executive order a few months ago to “democratize access” to alternative assets in 401(k) plans? Did Donald Trump wake up one day suddenly offended that grandma and grandpa couldn’t buy private equity like all of his rich buddies?
Please. I’ve never seen a more blatant use of “democratization” as a disguise for selling someone else’s bags. Private equity needs exit liquidity and everyday Americans have it..."https://ofdollarsanddata.com/the-one-thing-my-worst-investments-had-in-common/disclaimer : i have held brookfield stock for ~2 decades based on hard asset value and owner operations.
i have always sold the sub spins, some at loss, and never invested in their funds.
the largest alt managers have themselves been good holdings, commonly by steady fee income, but i encourage a deep look in their differences.
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So, how does private equity get out of this jam? They have two options:
Gradually re-price their investments to fair market value.
Sell to unsuspecting investors at current prices.
what are the other exits?
currently when all else fails, there seems to be seem shuffling from one alt manager to another in order to justify\confirm marked value.
and there is the possibly related situation that all of them seem to have massive actual or contractually committed dry powder, so curious where does that go? (my guess would be , ironically, public markets)
I don't disagree that PE Primary funds are in a tight situation which is why PE Secondaries are thriving (or pass the pillow dynamic you commented on)
I suppose one can make the argument that marking down to fair value is the equivalent of selling at a discount to a PE Secondary fund but that isn't called out.