Tiger Cubs vs Cathie Wood
Seriously what is the value proposition of Tiger / Viking / Lone Pine types of basically LO tech shops now that Cathie Wood and the whole "thematic actively-managed ETF" thing rose to prominence? Why do they have any business charging 2/20 for just beta? I know people will come in and say their private investments can deliver returns "uncorrelated to market" but if I were an LP I will just go to Insight / Summit / Francisco Partners for the same geist? Not a simp and no affiliation to ARK but Cathie Wood already made something like 150% this year and I doubt any of those 2/20 beta shops are near that number, and she charges much lower fees. If more of these types of funds proliferate then the beta suckers masquerading as L/S have absolutely no business in the industry (not talking about pure LO but the impostors I've mentioned).
can people chill out here?
pre-2020: Everything outside of an MM that is neutral of 700 factors sucks, their returns are lagging the market!
beginning of 2020: All these funds will get crushed owning tech in a recession! how can you own good businesses into a downturn at these multiples? why aren't they just moving in/out of names on credit card data like real investors?
end of 2020: wow these funds that are up 70% are all losers who aren't even factor neutral, why would anyone pay for that beta
I think MM kids here are insecure about how much they hate their jobs so they go way too hard shitting on everything else. Don’t blame them tbh, I’d hate my job if all I did was guess quarters and grind through random datasets for 70 hours a week.
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Why is everyone on this forum so obsessed with beta? It's like people have come out of their Finance 101 class and are now using it as the sole metric by which fund performance is measured...
At the end of the day, what these Tiger funds are offering is a product that appeals to a lot of investors with a pretty clear value prop - for a large swathe of institutional LPs with patient capital, they're most concerned with compounding returns and minimizing capital impairment, and the concept of beta / volatility is simply irrelevant. If you're an LP with a multi-decade time horizon, you'll happily pay 2/20 for a fund that grows your capital at a 15-20%+ net IRR without major losses and that's why these funds are so successful.
To your point on ARK - sure, if they can continue to compound capital at these high rates with low fees then they'll certainly attract assets, but the fund you're referencing has only been around 6 years, which just isn't a comparable track record to Lone Pine, Tiger, Viking, etc. which have all been around for ~20+ years...
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