WEBVTT - Quick Bite: What are the risks of private equity?

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<v Speaker 1>You're listening to a Sheesis podcast. You're all about democratizing

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<v Speaker 1>access to private equity. I'm really curious to see why

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<v Speaker 1>you're so passionate about that. Well, so, for the last

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<v Speaker 1>twenty years, we've seen et aps increase from about one

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<v Speaker 1>trillion to about thirteen trillion dollars. In corresponding with that

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<v Speaker 1>growth in et apps, we've seen a similar, almost identical

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<v Speaker 1>increase in private equity, growing from one trillion to thirteen trillion.

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<v Speaker 1>And now so we've seen this parallel path of two

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<v Speaker 1>fairly large markets increase in size, considerably increase in size

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<v Speaker 1>thirteen acts. But yet we haven't seen any sort of crossover,

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<v Speaker 1>no linkage, and so we're excited to provide opportunity for

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<v Speaker 1>retail investors to finally access to this private market that

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<v Speaker 1>they've been precluded from investing in all these years. What

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<v Speaker 1>are the risks though, First and foremost the risk that

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<v Speaker 1>investor would have in our funds, which is the same

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<v Speaker 1>that they would have, for example, if they invest in

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<v Speaker 1>the QQ queues or other growth oriented indices that invest

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<v Speaker 1>heavily in tech and healthcare. Is the market movement? So

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<v Speaker 1>if interest rates rise tech in other securities which are

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<v Speaker 1>considered long duration. Long duration means you get more of

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<v Speaker 1>your benefits in the future. Those types of stocks are

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<v Speaker 1>going to suffer when interest rates go up, or when

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<v Speaker 1>this market volatility, or when markets contract. So you investors

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<v Speaker 1>tend to see when when investors, when investors get nervous,

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<v Speaker 1>they tend to move more to value, or they tend

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<v Speaker 1>to move to cash, or they tend to move to bonds.

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<v Speaker 1>When you come to private equities, you'll see it's probably

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<v Speaker 1>even more exacerbated in the marketplace like that. So for example,

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<v Speaker 1>one of the stocks, and even though the private markets

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<v Speaker 1>have been you know, showing with SpaceX, you know, some

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<v Speaker 1>of the secondary markets are showing SpaceX you know doing

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<v Speaker 1>well and so forth, which you know, we would expect

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<v Speaker 1>that you know, to do well based on a lot

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<v Speaker 1>of idiosyncratic conditions. Some of the pure benchmarks in this

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<v Speaker 1>market are moving. So sometimes you'll see privates not correspond

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<v Speaker 1>with those movements because the other public markets are moving

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<v Speaker 1>daily and privates may be seeing a stationary They tend

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<v Speaker 1>to move in step function. They can move into step

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<v Speaker 1>function both up and they can move into step function down.

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<v Speaker 1>And as we saw in twenty one and twenty two,

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<v Speaker 1>privates you know, we're moving in a step function down

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<v Speaker 1>now we're seeing you know, over the last couple of

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<v Speaker 1>years markets were more positive, more growth oriented. We saw

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<v Speaker 1>privates appreciating during twenty twenty three and twenty twenty four,

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<v Speaker 1>early part of twenty twenty five, and we'll see soon.

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<v Speaker 1>For example, probably our best litmus test is going to

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<v Speaker 1>be one of our holdings, Klarna. We'll see how it

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<v Speaker 1>comes up. We bought it an evaluation of market evaluation

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<v Speaker 1>twelve billion. Well, it's going to come out to peer

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<v Speaker 1>benchmarks like a firm. There's a company in Australia called

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<v Speaker 1>after Pay that was bought by Block. You'll we'll see

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<v Speaker 1>very soon how the market is valuing these and we

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<v Speaker 1>expect our stock to move comparable to these valuations as well.

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<v Speaker 1>So we'll have a we'll have a pretty good insight

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<v Speaker 1>fairly soon, probably within the next few weeks, how how

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<v Speaker 1>that particular private security is holding up or not. When

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<v Speaker 1>market information comes out and investing involves risk, you might

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<v Speaker 1>lose the money you start with. We recommend talking to

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<v Speaker 1>a licensed financial advisor. We also recommend reading product disclosure

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<v Speaker 1>documents before deciding to invest.