Why would anyone invest in a Direct PE fund when you can invest in Secondaries? The reason I ask is because I've consistently seen Secondaries outperform Direct funds on an IRR-basis (thx j-curve mitigation). There also seems to be significantly less risk given that a Secondary investor holds insight re the performance of the actual portfolio companies before tossing money into a position.
Do Direct funds outperform these Secondaries on a cash-on-cash basis? That seems to be the only explanation I can think of. I'm really curious to understand if there's any other explanation, or if my assumption is simply not true...
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