Every serious investment research analyst knows about the “leap”. The leap is what gives you the confidence to embrace the unknown. The willingness to leap is what fortifies your resolve to go against or be with the crowd. Regardless of how many questions you have asked, memos you have read, models you have dissected, or […]
Even more than the illiquidity (long lock-up periods), relative lack of transparency (initial black box in most cases), and complexity (difficult to easily assess options), private assets fund “fees” draw the most criticism. Management fees typically average between 1.5% and 3% of committed or invested capital annually. Additionally, incentive fees (or “carry”) can range anywhere
Co-investments – Friend or Foe? Read More »
The ultimate goal for most private equity investors is for their private holdings to eventually become self-sustaining. This means that private investors ultimately want distributions from prior investments to one day cover or surpass ongoing capital calls. When this happens, investors no longer have to fund capital calls from other parts of their portfolio such
Re-ups – Do you still love me? Read More »
I will always be the first to proclaim that in the drudgery of private assets research and investing, anything that disrupts the mundane is a good thing. The year-in and year-out slog of endless pitch meetings, financial model dissections, never-ending data requests, and diplomatic rejections can become extremely draining on one’s psyche. Occasionally, the vacuum
Odd Ducks Preferred Read More »
I cannot pretend to fully understand the anguish GPs go through when fundraising. I can only imagine the logistical nightmare that comes with herding potential LPs of varying categories, geographies, concessions, and concerns/questions. Roundtripping a fundraising cycle must be a challenging feat, especially for the non-preordained (who make up the majority of managers) darlings of
At its core, investing is the utilization of research, perception, psychology, hard facts, data extrapolation, scenario projection, human behavior, trust, intuition, and goodwill to attempt to sneak a glimpse of the future. The truth is that this dynamic concoction of efforts is not a perfect science or easily discernable art. In fact, it is more
One of my goals as a research analyst is to attempt to use critical thinking to uphold or dispel the mystique behind certain widely accepted aspects of private assets investing. Many of these notions sound good when spoken or written but ring hollow when put under acute scrutiny. I have witnessed depictions of seemingly logical
“What is your target fund size?” – this is one of the first questions asked by LPs (Limited Partners) to GPs (General Partners) when contact is initiated. This question is foremost in the minds of LPs because the answer houses a bounty of information. The amount sought by a fund to make its investment strategy
Burgeoning – Getting Bigger and Bigger Read More »
Portfolio construction in private assets investing is a domain saturated with opinions. Several schools of thought and philosophies exist around what elements to consider, how to execute, and what to avoid. Trying to develop a sound approach can be an agitating and dizzying exercise aggravated further by the inherent long duration (illiquidity) of the asset
Uncorrelated Returns Read More »
Keeping with the sometimes-annoying tradition of a plethora of “lists” at the close of the year, I want to put forth my own, but with a little twist. I want to talk about ”six” things I wish to see less of in 2024. This list could be much longer as I have pages upon pages
