Asset Allocation: Using levered small cap ETFs as a Proxy for PE

I've seen the same argument on WSO before, but can't find any academic or empirical research to back it up. I did find an article from the CFA Insitute ("PE: The Emperor Has No Clothes").

Is anyone familiar with this thesis/idea? Would love to learn more about it. 

Hedge Fund Interview Course

  • 814 questions across 165 hedge funds. Crowdsourced from over 500,000 members.
  • 11 Detailed Sample Pitches and 10+ hours of video.
  • Trusted by over 1,000 aspiring hedge fund professionals just like you.

Comments (3)

  • Analyst 2 in AM - FI
Apr 8, 2021 - 1:15pm

Check out Dan Rasmussen, his older research on Verdad Capital's website, and his appearance on Invest Like The Best. He talks about buying levered small cap companies (like the companies themselves, I'm not sure if he uses leverage) to imitate PE in the public markets

Start Discussion

Total Avg Compensation

April 2021 Investment Banking

  • Director/MD (9) $911
  • Vice President (34) $348
  • Associates (183) $233
  • 2nd Year Analyst (104) $151
  • Intern/Summer Associate (95) $145
  • 3rd+ Year Analyst (26) $145
  • 1st Year Analyst (390) $132
  • Intern/Summer Analyst (317) $82