Which Funds Would You Actually Invest In?
I’ve been getting shown opportunities to invest in recent launches by some of the usual big names (KKR/BX/TPG for example) and also have been pitched some of the evergreen offerings. I suspect returns for most of these funds will be unexceptional given how saturated the market has become and now that they’re trying to raise money from a relative average person like myself. With that said, are there any managers you would actually invest your personal funds with, assuming you pay full 2/20 typical fees? Are some of the more admired players like Veritas, H&F, Warburg worth investing in if they become available?
I would never invest in any fund that's open to the general public. There's little chance you get real information on the underlying asset values... or even if you do, highly unlikely you get the methodology behind how they arrived at the value. It's not worth paying astronomical fees for so much opacity, and I'm not confident in liquidity. If LPs with major stakes in funds have to sell at 20% discounts to NAV, what do you think a retail investor's stake would be worth?
None…look at the basket of KKR / BX / ARES / APO (I leave Carlyle out because they’ve been struggling for a long time and that was known even with cursory outside in diligence) over the past 5 years, and compare that against the gross returns of any fund, in any area. Only top decile VC / growth / PE funds’ gross returns (which you would only have access to if you work there and have fee free coinvest) are in that range. Then add in cash drag, illiquidity, etc., and it becomes clear, the best investment any of these firms can offer is…their own stock
The only PE funds worth investing in is your own firm’s fund if it’s fee-free and carry-free and you think you can do better than 15% gross
Kps
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