Why do people not just invest in PE stocks?
If the stock market has 8% return and PE has 20%, why not just buy PE stock like KKR? I think i am missing something
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Because buying stock is investing in the corporation, while the fund is investing in a strategy. KKR stock is dependent on a lot more than how their investments do - firmwide margin, how well they are attracting investors to their funds, broader stock market, while the fund return is based only on the marks on a handful of investments. Those impact KKR's bottom line, but they are not the sole driver and the returns do not flow straight through to the stock performance.
KKR stock is not going to consistently return 20%+ every year - that group has had a very strong last ~18 months, but they were also down 40% in 2022.
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