Swedroe used to advise institutional fund managers. So he knows that world.Based on this one article (I haven’t read much else from Swedroe) this author is VERY naive when it comes to the private investing world. When the big dogs like Yale and Calpers invest in alternatives, they get best investment professionals from the Blackstones, Carlisles , & KKRs of the asset management world running their funds. When individual (retail) investors like us invest with these alternative asset managers, they are run by sales professionals. I think that Swedroe has been fooled by the smartest guys in the room. The alt offerings available to retail investors have proven to be inferior.
When asset managers show you glossy brochures of private credit and private equity returns that historically compound at +20% annually . . . those are the investments that university endowments get. Individuals get the unprofitable dregs that the Blackstones and Carlisles, and KKRs of the world can’t unload on Yale—and they happily charge us a fee to sell their crap to us.
I would reckon he knows the alternatives world, private capital, less well. But perhaps his mindset unconsciously defaults to thinking he is Yale.
He's cited a number of papers here showing:
- Venture Capital does not outperform the NASDAQ
- Private Equity does not outperform an equivalently leveraged S&P 500 (& he argued a Small Cap Value index would be more appropriate)
Statistics: Posted by Valuethinker — Fri Sep 20, 2024 4:05 am — Replies 20 — Views 924