1
00:00:02,480 --> 00:00:28,360
Speaker 1: Bloomberg Audio Studios, podcasts, radio news.

2
00:00:28,400 --> 00:00:32,040
Speaker 2: There used to be a clear distinction between public and

3
00:00:32,159 --> 00:00:36,920
Speaker 2: private companies. Firm would take years or even decades to grow,

4
00:00:37,440 --> 00:00:41,800
Speaker 2: build their revenues and profits, and eventually tap the public

5
00:00:41,880 --> 00:00:45,880
Speaker 2: markets to go national or even global. That doesn't seem

6
00:00:45,920 --> 00:00:50,320
Speaker 2: to happen anymore. As endless amounts of capital sloshes through

7
00:00:50,360 --> 00:00:54,280
Speaker 2: the system, More and more companies are staying private, but

8
00:00:54,400 --> 00:00:58,720
Speaker 2: there's a group of private investors that are accessing public

9
00:00:58,840 --> 00:01:04,520
Speaker 2: capital through various rappers, including ETFs. To help us unpack

10
00:01:04,600 --> 00:01:07,000
Speaker 2: all of this and what it means for your portfolio,

11
00:01:07,160 --> 00:01:09,840
Speaker 2: let's bring in Dave Nadig. He's president and director of

12
00:01:09,880 --> 00:01:12,960
Speaker 2: research at ETF dot Com, and he shares with us

13
00:01:13,000 --> 00:01:18,880
Speaker 2: how investors should navigate these public private hybrids. Dave is

14
00:01:18,920 --> 00:01:22,120
Speaker 2: also the author of the book A Comprehensive Guide to

15
00:01:22,240 --> 00:01:26,639
Speaker 2: Exchange Traded Funds. So, Dave, there was once a very

16
00:01:26,680 --> 00:01:32,240
Speaker 2: bright line between public and private markets. Has that line

17
00:01:32,240 --> 00:01:35,760
Speaker 2: disappeared or has it simply just moved into rappers that

18
00:01:35,880 --> 00:01:37,360
Speaker 2: investors don't fully grock.

19
00:01:37,959 --> 00:01:41,240
Speaker 3: I think it's more the latter. I think the rules

20
00:01:41,280 --> 00:01:44,240
Speaker 3: haven't really changed. I think that's important to point out here.

21
00:01:44,240 --> 00:01:46,480
Speaker 3: It's not like we passed a law that' said everybody

22
00:01:46,520 --> 00:01:49,720
Speaker 3: can get in. What's changed is that there's a willingness

23
00:01:49,760 --> 00:01:53,480
Speaker 3: by the issuers of product to get a lot more

24
00:01:53,520 --> 00:01:58,040
Speaker 3: aggressive in what they're positioning as retail appropriate vehicles. So

25
00:01:58,520 --> 00:02:00,800
Speaker 3: there's not a new rapper here. What there are are

26
00:02:00,880 --> 00:02:04,080
Speaker 3: new ways of stretching the edges of rappers that have

27
00:02:04,160 --> 00:02:06,480
Speaker 3: been around for you know, almost one hundred years at

28
00:02:06,480 --> 00:02:07,320
Speaker 3: this point.

29
00:02:07,560 --> 00:02:11,120
Speaker 2: So let's put some numbers on that. Since twenty ten,

30
00:02:11,960 --> 00:02:15,920
Speaker 2: Private Credit raised something like one point eight trillion dollars.

31
00:02:16,560 --> 00:02:22,679
Speaker 2: Every major firm, Blackstone, Apollo, KKR, Ares, Blue Oul, they're

32
00:02:22,680 --> 00:02:28,360
Speaker 2: building retail channels. There were three hundred and fourteen interval

33
00:02:28,440 --> 00:02:31,600
Speaker 2: funds tend or off for funds with two hundred and

34
00:02:31,600 --> 00:02:35,640
Speaker 2: seventy seven billion dollars in assets as of January of

35
00:02:35,680 --> 00:02:39,280
Speaker 2: this year, of twenty twenty six. A lot of chatter

36
00:02:39,440 --> 00:02:42,760
Speaker 2: that private is going after the four to one K market. Next,

37
00:02:43,400 --> 00:02:46,279
Speaker 2: what does all this capital mean to investors?

38
00:02:46,800 --> 00:02:49,360
Speaker 3: Well, you know, I think the thing investors need to

39
00:02:49,400 --> 00:02:52,680
Speaker 3: realize is that if you're the one being offered a product,

40
00:02:52,720 --> 00:02:56,560
Speaker 3: you need to ask yourself why right, if somebody's coming

41
00:02:56,560 --> 00:02:58,240
Speaker 3: to you and saying I want to give you access

42
00:02:58,240 --> 00:03:02,200
Speaker 3: to private credit or private equity. It's very smart to say,

43
00:03:02,240 --> 00:03:03,960
Speaker 3: who is selling this to me and why are they

44
00:03:04,000 --> 00:03:07,400
Speaker 3: selling it to me now? And unfortunately the real answer

45
00:03:07,440 --> 00:03:09,920
Speaker 3: here is at the you know, look, we're in this

46
00:03:10,000 --> 00:03:13,280
Speaker 3: incredible bull market. Let's just be really honest. Things have

47
00:03:13,360 --> 00:03:16,640
Speaker 3: been going up for a very very long time. And

48
00:03:16,720 --> 00:03:18,720
Speaker 3: because of that, there is a lot of money that

49
00:03:18,840 --> 00:03:21,760
Speaker 3: is looking for exits. And at the end of every

50
00:03:21,760 --> 00:03:25,160
Speaker 3: cycle in my career, it is retail that is looked

51
00:03:25,200 --> 00:03:29,440
Speaker 3: at to be the exit. Whether that's buying beanie babies,

52
00:03:29,600 --> 00:03:32,359
Speaker 3: use cars, or stocks, it doesn't really matter. At the

53
00:03:32,440 --> 00:03:34,640
Speaker 3: end of the day, the retail investor is the one

54
00:03:35,000 --> 00:03:38,080
Speaker 3: that the quote unquote smart money, the big institutional money

55
00:03:38,400 --> 00:03:42,240
Speaker 3: is looking to unload their positions onto And so it's

56
00:03:42,360 --> 00:03:44,800
Speaker 3: not surprising to me that we're seeing a lot of

57
00:03:44,800 --> 00:03:50,000
Speaker 3: discussion around quote unquote democratizing private investing. Whether it's venture

58
00:03:50,040 --> 00:03:52,960
Speaker 3: capital or private credit, doesn't really matter, it's all the

59
00:03:53,000 --> 00:03:57,000
Speaker 3: same thing. And so now that we just have to

60
00:03:57,080 --> 00:03:59,800
Speaker 3: accept that we're going to be marketed these products and

61
00:04:00,120 --> 00:04:03,440
Speaker 3: are the most part I think investors are not well

62
00:04:03,600 --> 00:04:07,000
Speaker 3: served by them, but I think that that's worth poking.

63
00:04:06,640 --> 00:04:09,720
Speaker 2: At So we should all take some advice from that

64
00:04:09,800 --> 00:04:14,080
Speaker 2: great alternatives investor Groutcho Marx. I don't want to be

65
00:04:14,120 --> 00:04:17,000
Speaker 2: a member of any club that would have me exactly.

66
00:04:17,839 --> 00:04:19,880
Speaker 2: So let's talk a little bit about how this used

67
00:04:19,880 --> 00:04:23,520
Speaker 2: to look in the old days. Historically, companies would go

68
00:04:23,600 --> 00:04:27,599
Speaker 2: public to raise growth capital. Today it seems like a

69
00:04:27,640 --> 00:04:32,400
Speaker 2: lot of the best known private firms can stay private indefinitely,

70
00:04:32,960 --> 00:04:35,919
Speaker 2: and those that go public seem just to be reaching

71
00:04:35,960 --> 00:04:40,640
Speaker 2: for liquidly for insiders. Is that what's happening with these

72
00:04:40,720 --> 00:04:45,120
Speaker 2: various forty Act funds in all sorts of new rappers.

73
00:04:45,560 --> 00:04:47,560
Speaker 3: Yeah, there's two things going on here. So on the

74
00:04:47,600 --> 00:04:51,200
Speaker 3: one hand, eventually these private companies go public, and there's

75
00:04:51,200 --> 00:04:54,160
Speaker 3: a lot of effort to get investors involved in those IPOs.

76
00:04:54,440 --> 00:04:57,479
Speaker 3: That's the end state of what we're talking about. I

77
00:04:57,480 --> 00:04:59,680
Speaker 3: want to focus a little bit more on the beginning state.

78
00:05:00,120 --> 00:05:03,960
Speaker 3: How the actual money in private equity gets there, and

79
00:05:04,480 --> 00:05:06,719
Speaker 3: historically how that money ends up in a private company

80
00:05:06,800 --> 00:05:09,160
Speaker 3: is pretty simple. There's some pool of assets, generally it's

81
00:05:09,160 --> 00:05:12,000
Speaker 3: an LLC or a limited partnership, and it collects a

82
00:05:12,000 --> 00:05:14,279
Speaker 3: billion dollars of money from a bunch of rich people

83
00:05:14,279 --> 00:05:18,080
Speaker 3: and endowments and institutions and financial advisors, and that money

84
00:05:18,080 --> 00:05:20,000
Speaker 3: goes into a pool which then makes a bunch of

85
00:05:20,040 --> 00:05:24,440
Speaker 3: small investments in say fifteen different startups in Silicon Valley,

86
00:05:24,720 --> 00:05:26,960
Speaker 3: and the idea is that one of those hits big,

87
00:05:27,240 --> 00:05:30,160
Speaker 3: and then the payout from that is either that company

88
00:05:30,200 --> 00:05:33,320
Speaker 3: gets bought or it goes IPO, and all the investors

89
00:05:33,320 --> 00:05:36,440
Speaker 3: in that limited partnership then get a big check. That's

90
00:05:36,480 --> 00:05:39,960
Speaker 3: sort of the structure. How that little pool of private

91
00:05:40,000 --> 00:05:43,680
Speaker 3: money gets managed can really vary. It's very common for

92
00:05:43,720 --> 00:05:46,640
Speaker 3: it to be in just literally a limited partnership, but

93
00:05:46,720 --> 00:05:48,359
Speaker 3: the problem with that is you can only get so

94
00:05:48,440 --> 00:05:50,680
Speaker 3: many investors into it. When you want to get a

95
00:05:50,760 --> 00:05:52,880
Speaker 3: lot of investors, you have to go to some sort

96
00:05:52,920 --> 00:05:56,880
Speaker 3: of regulated vehicle, and then you end up in usually

97
00:05:56,920 --> 00:05:59,760
Speaker 3: a closed end fund of some kind, whether it's a

98
00:06:00,080 --> 00:06:02,840
Speaker 3: raided closed end fund, a non traded closed end fund,

99
00:06:03,160 --> 00:06:06,159
Speaker 3: an interval fund, a tender offer fund. There are all

100
00:06:06,200 --> 00:06:08,880
Speaker 3: sort of versions of the same things. They're funds that

101
00:06:08,880 --> 00:06:12,240
Speaker 3: are roach motels. Money goes in, money never comes out.

102
00:06:12,800 --> 00:06:16,080
Speaker 2: So define those various things. What's the difference between a

103
00:06:16,160 --> 00:06:23,279
Speaker 2: tender off of fund, a limited fund, a closed end fund?

104
00:06:23,440 --> 00:06:27,280
Speaker 2: For people who may not be hipped all these different acronyms.

105
00:06:27,720 --> 00:06:30,719
Speaker 2: What is going on in these and interval funds go

106
00:06:30,800 --> 00:06:31,559
Speaker 2: through the whole list.

107
00:06:31,760 --> 00:06:35,440
Speaker 3: Yeah, So really the main structure is the closed end

108
00:06:35,440 --> 00:06:38,000
Speaker 3: fund or the CEF, which is part of the forty Act,

109
00:06:38,160 --> 00:06:40,599
Speaker 3: just like an open ended fund, which is an ETF

110
00:06:40,680 --> 00:06:44,440
Speaker 3: or a mutual fund, same rules, same laws that have board

111
00:06:45,160 --> 00:06:48,400
Speaker 3: very similar structures. At the very very high level. The

112
00:06:48,440 --> 00:06:52,360
Speaker 3: biggest difference is a closed end fund is basically subscribed

113
00:06:52,440 --> 00:06:55,280
Speaker 3: to once. Like an IPO, you go out, you say,

114
00:06:55,320 --> 00:06:57,360
Speaker 3: I want to raise a billion dollars. You see if

115
00:06:57,360 --> 00:06:58,560
Speaker 3: you can get a bunch of people to give you

116
00:06:58,560 --> 00:07:01,880
Speaker 3: that billion dollars. Now, that is a closed pool of money,

117
00:07:02,400 --> 00:07:05,240
Speaker 3: and whether or not money ever comes out of that pool,

118
00:07:05,279 --> 00:07:09,080
Speaker 3: again depends on how the rules are written for that fund.

119
00:07:09,640 --> 00:07:13,160
Speaker 3: In the most open, in the most investor friendly version,

120
00:07:13,560 --> 00:07:16,680
Speaker 3: it tends to be a traded closed end fund, meaning

121
00:07:16,720 --> 00:07:18,120
Speaker 3: you can go to anise and you can get a

122
00:07:18,160 --> 00:07:20,080
Speaker 3: bid for it, and it maybe trading at a discount

123
00:07:20,160 --> 00:07:23,160
Speaker 3: or not. That's the version that For instance, Pershing Square

124
00:07:23,200 --> 00:07:27,360
Speaker 3: just launched. Pershing Square just filed PSUs, which is a

125
00:07:27,520 --> 00:07:30,400
Speaker 3: fairly traditional closed end fund. They raised a bunch of money.

126
00:07:30,520 --> 00:07:33,520
Speaker 3: Now it trades in the open market, and much to

127
00:07:34,240 --> 00:07:36,960
Speaker 3: the dismay of Bill Ackman, it's trading at a twenty

128
00:07:36,960 --> 00:07:40,160
Speaker 3: percent discount to what it's actually worth. That's pretty common

129
00:07:40,160 --> 00:07:42,600
Speaker 3: and closed end funds, because there's no liquidity. You can

130
00:07:42,680 --> 00:07:45,240
Speaker 3: only buy it or sell it from other people who

131
00:07:45,280 --> 00:07:46,560
Speaker 3: happen to want it or own it.

132
00:07:46,960 --> 00:07:51,640
Speaker 2: And to clarify PSUs, are the holdings private or public

133
00:07:51,760 --> 00:07:52,160
Speaker 2: or both?

134
00:07:52,960 --> 00:07:56,560
Speaker 3: At the moment, that's really going to be public equities.

135
00:07:56,600 --> 00:07:58,200
Speaker 3: I think what people are trying to buy there is

136
00:07:58,200 --> 00:08:02,840
Speaker 3: Bill Ackman's high concentration, use some leverage, you know, to

137
00:08:02,920 --> 00:08:06,960
Speaker 3: get better exposures, special situations kind of investing. That was

138
00:08:06,960 --> 00:08:09,240
Speaker 3: a specific offering that he's tried. I think this is

139
00:08:09,240 --> 00:08:12,040
Speaker 3: his third tilt at this windmill and finally got this

140
00:08:12,080 --> 00:08:14,360
Speaker 3: one to close, albeit not with the pricing that he

141
00:08:14,400 --> 00:08:17,000
Speaker 3: probably would have hoped for. But that's actually a pretty

142
00:08:17,000 --> 00:08:19,320
Speaker 3: traditional closed end fund. You raise a bunch of money,

143
00:08:19,560 --> 00:08:22,240
Speaker 3: you trade it back and forth with your friends. Maybe

144
00:08:22,280 --> 00:08:24,880
Speaker 3: it throws off dividends, maybe it throws off a capital

145
00:08:24,920 --> 00:08:27,720
Speaker 3: gain someday if they have a big win. But you're

146
00:08:28,080 --> 00:08:30,600
Speaker 3: you're never expecting to get your money out. You can

147
00:08:30,640 --> 00:08:33,000
Speaker 3: do the exact same thing and not have it ever

148
00:08:33,080 --> 00:08:36,440
Speaker 3: be traded. And that's a that's a non traded private

149
00:08:36,679 --> 00:08:38,160
Speaker 3: equity fund, and.

150
00:08:38,640 --> 00:08:40,680
Speaker 4: That that's a pretty common thing. B reached.

151
00:08:40,800 --> 00:08:42,880
Speaker 3: A really well known ref fund is one of those

152
00:08:42,880 --> 00:08:46,280
Speaker 3: sort of non traded closed end funds, and we've had

153
00:08:46,280 --> 00:08:50,760
Speaker 3: a bunch of those launched recently, also really targeting private equity.

154
00:08:50,800 --> 00:08:52,640
Speaker 4: So that's another very common version of.

155
00:08:52,600 --> 00:08:56,880
Speaker 2: It, and a full disclosure. What I'm about to talk

156
00:08:56,880 --> 00:09:01,120
Speaker 2: about is something I own. Boas Weinstein has an ETF

157
00:09:01,400 --> 00:09:08,199
Speaker 2: CEFS closed end funds that he looks for these closed

158
00:09:08,280 --> 00:09:10,920
Speaker 2: end funds that are trading at a discount to NAV.

159
00:09:11,200 --> 00:09:15,559
Speaker 2: He buys them and then either agitates for the manager

160
00:09:16,080 --> 00:09:19,160
Speaker 2: to either buy back enough stock so it's trading at NAV,

161
00:09:19,400 --> 00:09:21,800
Speaker 2: or to break it up and just sell all the

162
00:09:21,800 --> 00:09:24,040
Speaker 2: pieces and return the money, or give the stock back

163
00:09:24,760 --> 00:09:27,880
Speaker 2: to the investors. Why do so many of these closed

164
00:09:27,960 --> 00:09:32,760
Speaker 2: end funds trade? It's such a discount that activists are

165
00:09:32,960 --> 00:09:38,160
Speaker 2: haranguing management for what essentially is a dollar trading at

166
00:09:38,200 --> 00:09:39,080
Speaker 2: seventy five cents.

167
00:09:39,240 --> 00:09:41,959
Speaker 3: Well, the discount comes because of what you just said.

168
00:09:42,840 --> 00:09:44,920
Speaker 3: There's no liquidity in there. There's no way to ever

169
00:09:45,040 --> 00:09:50,000
Speaker 3: extract real value from the fund. It's permanent capital largely

170
00:09:50,080 --> 00:09:52,760
Speaker 3: from the perspective of the issuer. That's why the issuer

171
00:09:52,880 --> 00:09:54,959
Speaker 3: loves it because they're just like, I have a two

172
00:09:54,960 --> 00:09:58,120
Speaker 3: billion dollar portfolio. I never have to worry about providing liquidity.

173
00:09:58,240 --> 00:10:01,560
Speaker 3: I'm fine. So if it trades the discount, that manager

174
00:10:01,720 --> 00:10:04,920
Speaker 3: really doesn't care. They're still getting paid based on NAV.

175
00:10:06,520 --> 00:10:06,680
Speaker 4: You know.

176
00:10:06,760 --> 00:10:09,240
Speaker 3: Often they're getting paid on NAV that's been goosed by

177
00:10:09,240 --> 00:10:12,080
Speaker 3: a bunch of leverage, so they still get paid. The

178
00:10:12,200 --> 00:10:14,360
Speaker 3: end investor is the one sitting here going why did

179
00:10:14,400 --> 00:10:14,720
Speaker 3: I pay?

180
00:10:14,840 --> 00:10:14,920
Speaker 2: Like?

181
00:10:14,960 --> 00:10:17,480
Speaker 3: Why am I sitting here at a discount? So that

182
00:10:17,720 --> 00:10:21,560
Speaker 3: R being out of the discount is as a classic tale.

183
00:10:21,600 --> 00:10:23,760
Speaker 3: People have been doing that since the sixties, and that

184
00:10:24,320 --> 00:10:26,200
Speaker 3: story for closed end funds.

185
00:10:25,880 --> 00:10:30,640
Speaker 2: Right ETFs, the R means that there's no discount because

186
00:10:30,640 --> 00:10:33,480
Speaker 2: you could always buy it and open the wrapper and

187
00:10:33,600 --> 00:10:36,760
Speaker 2: sell the stock. So it just seems weird that closed

188
00:10:36,840 --> 00:10:41,160
Speaker 2: end funds don't have the same. Yeah, it responds to R.

189
00:10:41,520 --> 00:10:44,240
Speaker 2: It's like an appendix on regulatory structure.

190
00:10:44,400 --> 00:10:44,600
Speaker 4: Right.

191
00:10:44,640 --> 00:10:48,840
Speaker 3: It's this like vestigial piece of flesh that's attached to

192
00:10:48,880 --> 00:10:51,280
Speaker 3: the forty Act. And that's why you mentioned at the

193
00:10:51,280 --> 00:10:53,320
Speaker 3: top of the show they're only a couple hundred of

194
00:10:53,320 --> 00:10:57,040
Speaker 3: these things right, And generally people only use the closed

195
00:10:57,120 --> 00:10:59,760
Speaker 3: end fund structure when they have one of a couple

196
00:10:59,800 --> 00:11:02,800
Speaker 3: problems to solve. One is they're buying stuff they literally

197
00:11:02,880 --> 00:11:05,920
Speaker 3: can't sell. So in the case of us VC, which

198
00:11:06,000 --> 00:11:08,320
Speaker 3: is the one that Angel lists and of all just launched,

199
00:11:08,880 --> 00:11:10,800
Speaker 3: I'm still trying to get my money into.

200
00:11:11,200 --> 00:11:11,800
Speaker 4: The whole idea.

201
00:11:11,880 --> 00:11:15,280
Speaker 3: There is that buying stakes and SpaceX and private companies

202
00:11:15,320 --> 00:11:18,480
Speaker 3: like that, they can't just liquidate that they need to

203
00:11:18,480 --> 00:11:21,880
Speaker 3: be able to close the liquidity gate. That's usually reason

204
00:11:21,960 --> 00:11:25,160
Speaker 3: number two, and reason number Reason number two is usually leverage.

205
00:11:25,360 --> 00:11:27,760
Speaker 3: So if you're trying to do some sort of sort

206
00:11:27,800 --> 00:11:30,959
Speaker 3: of you know, like levering up bonds to try to

207
00:11:31,000 --> 00:11:33,160
Speaker 3: get fifteen percent returns out of them, you know, those

208
00:11:33,240 --> 00:11:37,440
Speaker 3: kinds of portable alpha strategies or risk parody strategies where

209
00:11:37,440 --> 00:11:38,920
Speaker 3: you really need to be able to go along and

210
00:11:38,960 --> 00:11:41,120
Speaker 3: short and get lots of leverage. You can do that

211
00:11:41,320 --> 00:11:43,440
Speaker 3: in the closed end fund structure, where you can't do

212
00:11:43,520 --> 00:11:46,440
Speaker 3: that in a traditional mutual funder ETF. So it does

213
00:11:46,600 --> 00:11:50,000
Speaker 3: solve a problem. The issue is it's very rarely a

214
00:11:50,040 --> 00:11:52,400
Speaker 3: problem the normal investor has.

215
00:11:52,960 --> 00:11:56,720
Speaker 2: So so you mentioned ps US, and I remember that

216
00:11:56,800 --> 00:11:59,240
Speaker 2: fee was not five BIPs. What was the fee on

217
00:11:59,320 --> 00:12:00,000
Speaker 2: ps US?

218
00:12:01,040 --> 00:12:02,360
Speaker 4: I think it's two percent.

219
00:12:02,760 --> 00:12:05,640
Speaker 2: Well that's a chunk of cash, but no, twenty, it's

220
00:12:05,640 --> 00:12:06,880
Speaker 2: not a two and twenty hedge fund.

221
00:12:06,920 --> 00:12:09,400
Speaker 4: It's just a two exactly.

222
00:12:09,520 --> 00:12:12,320
Speaker 2: And what about products like USVC. By the way, I

223
00:12:12,360 --> 00:12:15,760
Speaker 2: love that these all have the name US in it.

224
00:12:15,800 --> 00:12:18,800
Speaker 2: I guess the plan is they'll do an overseas version

225
00:12:18,840 --> 00:12:19,880
Speaker 2: one day as well.

226
00:12:19,880 --> 00:12:21,560
Speaker 4: I guess. I guess.

227
00:12:21,720 --> 00:12:24,880
Speaker 3: Look, they're all all of these funds are generally pretty expensive,

228
00:12:25,960 --> 00:12:28,720
Speaker 3: you know, something like the USPE, which is the one

229
00:12:28,720 --> 00:12:31,360
Speaker 3: that's come from TAP, which is basically just going to

230
00:12:31,400 --> 00:12:33,480
Speaker 3: buy a bunch of private stuff that they get access

231
00:12:33,520 --> 00:12:36,400
Speaker 3: to that's charging two percent. But then they're what they're

232
00:12:36,440 --> 00:12:38,679
Speaker 3: buying is other funds, and so you get a lot

233
00:12:38,679 --> 00:12:41,560
Speaker 3: of acquired fund expenses. So it's not uncommon to see

234
00:12:41,600 --> 00:12:45,240
Speaker 3: these expenses creep up towards three or four percent when

235
00:12:45,240 --> 00:12:46,360
Speaker 3: you start rolling all this stuff.

236
00:12:46,920 --> 00:12:49,760
Speaker 4: It's fees on fees. Because it's fees on fees.

237
00:12:50,080 --> 00:12:53,080
Speaker 3: Now, I should point out, though, the us VC is

238
00:12:53,120 --> 00:12:55,360
Speaker 3: the one that made a bunch of big splash lately

239
00:12:55,360 --> 00:12:57,880
Speaker 3: because they're basically saying the limits five hundred dollars, get

240
00:12:57,880 --> 00:13:00,640
Speaker 3: your money in now, and their structure that is a

241
00:13:00,640 --> 00:13:03,240
Speaker 3: bit more of an interval fund where once a quarter

242
00:13:03,320 --> 00:13:06,319
Speaker 3: they're saying we'll give five percent liquidity to people who

243
00:13:06,360 --> 00:13:09,520
Speaker 3: want to get out. That's again a fairly common structure,

244
00:13:10,040 --> 00:13:12,480
Speaker 3: although none of those things are written in stone. They

245
00:13:12,520 --> 00:13:14,080
Speaker 3: can say they're going to do that and then not

246
00:13:14,120 --> 00:13:15,520
Speaker 3: do it, and there's no recourse.

247
00:13:15,559 --> 00:13:18,959
Speaker 2: But the USCC does not trade on any.

248
00:13:19,160 --> 00:13:21,120
Speaker 4: It won't trade anywhere. It's non traded.

249
00:13:21,200 --> 00:13:23,120
Speaker 3: So the only way you'll ever get your money out

250
00:13:23,120 --> 00:13:25,600
Speaker 3: of it is either they make a distribution because something

251
00:13:25,960 --> 00:13:28,760
Speaker 3: big happened in the fund, or you sign up for

252
00:13:28,800 --> 00:13:30,959
Speaker 3: one of these quarterly windows where you can get five

253
00:13:30,960 --> 00:13:31,959
Speaker 3: percent of your money out.

254
00:13:32,120 --> 00:13:37,960
Speaker 2: So some of these are private and hold non liquid assets.

255
00:13:38,520 --> 00:13:42,679
Speaker 2: Some of these are public and hold public assets. Are

256
00:13:42,720 --> 00:13:46,959
Speaker 2: there public versions of these that hold private assets.

257
00:13:46,960 --> 00:13:50,920
Speaker 3: Well, the equivalent to that would be something like USPE,

258
00:13:51,200 --> 00:13:53,640
Speaker 3: which is the one that's coming from TAP. The idea

259
00:13:53,720 --> 00:13:55,400
Speaker 3: there is that they're going to have it'll be trading

260
00:13:55,440 --> 00:13:58,160
Speaker 3: on etchange. No, it's not an ETF. It's still a

261
00:13:58,160 --> 00:14:00,320
Speaker 3: closed und find but it'll be a trade to close fund.

262
00:14:00,320 --> 00:14:03,160
Speaker 3: So we'll have these big discounts. The other version of

263
00:14:03,160 --> 00:14:05,000
Speaker 3: this is you can take an ETF and use the

264
00:14:05,080 --> 00:14:09,040
Speaker 3: fifteen percent liquid bucket that all mutual funds are technically

265
00:14:09,040 --> 00:14:12,160
Speaker 3: allowed to have, and you can try to use that aggressively.

266
00:14:12,280 --> 00:14:15,680
Speaker 3: There are ETFs doing that. XOVR is the big one

267
00:14:15,679 --> 00:14:18,920
Speaker 3: that has a fifteen percent SpaceX chunk in it. Ron

268
00:14:18,960 --> 00:14:22,600
Speaker 3: Baron's funds RONB has a big chunk of SpaceX in

269
00:14:22,640 --> 00:14:25,880
Speaker 3: there right now. So there are more ETFs and mutual

270
00:14:25,880 --> 00:14:29,200
Speaker 3: funds that are trying to do that, but it's obviously

271
00:14:29,240 --> 00:14:31,520
Speaker 3: fraught with peril. You don't want to go too down,

272
00:14:31,600 --> 00:14:33,360
Speaker 3: too far down that road, and then have a giant

273
00:14:33,360 --> 00:14:34,760
Speaker 3: pile of redemptions you can't meet.

274
00:14:35,480 --> 00:14:41,280
Speaker 2: So here's the obvious question USPE or even better pershing

275
00:14:41,360 --> 00:14:48,120
Speaker 2: square PSUs with Bill Ackman. These funds convinced savvy institutional

276
00:14:48,160 --> 00:14:52,040
Speaker 2: investors and others to put a bunch of money in.

277
00:14:52,120 --> 00:14:55,240
Speaker 2: They launch at a couple of billion dollars. Wait, I

278
00:14:55,280 --> 00:14:59,760
Speaker 2: could buy me some Bill Ackman at a twenty percent discount.

279
00:15:00,600 --> 00:15:04,360
Speaker 2: How come more people don't see this and say, oh,

280
00:15:04,480 --> 00:15:08,280
Speaker 2: I get I get to buy a premiere hedge fund

281
00:15:08,360 --> 00:15:13,520
Speaker 2: manager at a discount. Nav what's the disconnect. Why haven't

282
00:15:13,560 --> 00:15:17,680
Speaker 2: people themselves just said I want some of this is

283
00:15:18,000 --> 00:15:20,560
Speaker 2: the expectation that, hey, if you want to be in

284
00:15:20,600 --> 00:15:23,840
Speaker 2: Persian Square, that's where all the good stuff has taking place.

285
00:15:23,880 --> 00:15:28,360
Speaker 2: But the PSUs just isn't going to have the closed

286
00:15:28,440 --> 00:15:30,120
Speaker 2: in fund isn't going to have the same juice.

287
00:15:30,280 --> 00:15:33,320
Speaker 3: Interestingly, part of the reason Actman had such a hard

288
00:15:33,360 --> 00:15:36,640
Speaker 3: time getting this capital raised done over the years was

289
00:15:36,680 --> 00:15:38,520
Speaker 3: exactly that argument. People were like, I want to be

290
00:15:38,600 --> 00:15:40,600
Speaker 3: part of the management company. I don't want to own

291
00:15:40,600 --> 00:15:43,480
Speaker 3: this garbage fund. And so what they actually floated was

292
00:15:43,560 --> 00:15:46,600
Speaker 3: the combo platter where for every I think it's every

293
00:15:46,640 --> 00:15:49,040
Speaker 3: four or five shares of you get one fund, you

294
00:15:49,080 --> 00:15:52,280
Speaker 3: get one share of the of the big y of

295
00:15:52,320 --> 00:15:52,760
Speaker 3: the main.

296
00:15:52,720 --> 00:15:53,760
Speaker 4: So you're both an LP.

297
00:15:54,280 --> 00:15:57,280
Speaker 2: So if this was a hedge fund, an LP and

298
00:15:57,320 --> 00:16:00,120
Speaker 2: a GP at the same time, which is a very

299
00:16:00,160 --> 00:16:03,240
Speaker 2: clever way to do it. How much of the overall

300
00:16:03,440 --> 00:16:08,120
Speaker 2: GP did Ackman allow outsiders to buy or is it

301
00:16:08,200 --> 00:16:09,560
Speaker 2: just built into the fund?

302
00:16:09,800 --> 00:16:13,200
Speaker 3: It's built into the structure of the fund. I don't

303
00:16:13,240 --> 00:16:13,720
Speaker 3: know exactly.

304
00:16:13,720 --> 00:16:17,480
Speaker 2: If you're not getting twenty percent of the gply.

305
00:16:16,800 --> 00:16:18,800
Speaker 4: Not getting one hundred percent of it you're getting.

306
00:16:18,480 --> 00:16:20,680
Speaker 2: One out of well, if you're buying it, you're only

307
00:16:20,680 --> 00:16:22,880
Speaker 2: getting one out of five shares or whatever there is.

308
00:16:23,320 --> 00:16:26,040
Speaker 2: But he could say, oh, we're gonna have one hundred

309
00:16:26,080 --> 00:16:28,040
Speaker 2: million shares and I'm gonna put a million into this

310
00:16:28,160 --> 00:16:29,240
Speaker 2: or whatever the float is.

311
00:16:29,520 --> 00:16:31,760
Speaker 3: Right, I mean, this is part of the problem with

312
00:16:31,840 --> 00:16:35,040
Speaker 3: these kinds of funds is that you ask why people aren't,

313
00:16:35,200 --> 00:16:37,280
Speaker 3: you know, storming the gates to try to get into

314
00:16:37,320 --> 00:16:39,800
Speaker 3: this thing. Well, you don't know that much about it, right,

315
00:16:39,840 --> 00:16:43,240
Speaker 3: You're not getting regular reporting, it's not super transparent. You

316
00:16:43,280 --> 00:16:45,840
Speaker 3: don't really know what the marks are. Obviously, if they're

317
00:16:45,880 --> 00:16:48,800
Speaker 3: only holding public securities, you can impute the marks yourself,

318
00:16:48,800 --> 00:16:51,720
Speaker 3: that's fine. But on anything that's private, you're just kind

319
00:16:51,720 --> 00:16:54,920
Speaker 3: of guessing and taking their word for it for it. So, yeah,

320
00:16:54,960 --> 00:16:56,960
Speaker 3: it's trading at a twenty percent discount to what you

321
00:16:57,000 --> 00:16:59,520
Speaker 3: think it's worth, But is that really even what it's worth?

322
00:16:59,560 --> 00:17:01,960
Speaker 3: And how do you value the GP component of this

323
00:17:02,440 --> 00:17:05,880
Speaker 3: in that twenty percent discount, et cetera. So I think

324
00:17:05,920 --> 00:17:09,000
Speaker 3: the combo platter of lack of transparency and lack of

325
00:17:09,080 --> 00:17:12,600
Speaker 3: liquidity is enough to scare most rational investors out of

326
00:17:12,600 --> 00:17:13,119
Speaker 3: something like this.

327
00:17:13,600 --> 00:17:17,159
Speaker 2: So those are the downsides. There obviously has to be

328
00:17:17,359 --> 00:17:20,919
Speaker 2: an upside. If someone like Bill Ackman is saying I

329
00:17:20,960 --> 00:17:24,280
Speaker 2: have an idea and two billion dollars worth of smart

330
00:17:24,320 --> 00:17:29,960
Speaker 2: money theoretically through some cash into that, what's the upside, Well.

331
00:17:29,760 --> 00:17:32,359
Speaker 3: The upside is Bill Ackman could be right, right, Like,

332
00:17:32,440 --> 00:17:35,800
Speaker 3: I mean, he runs high concentration, somewhat levered portfolios of

333
00:17:36,080 --> 00:17:37,360
Speaker 3: I know, a dozen stocks.

334
00:17:38,280 --> 00:17:39,480
Speaker 4: That's a high conviction bed.

335
00:17:39,520 --> 00:17:42,760
Speaker 3: If he gets those dozen stocks right, he could absolutely

336
00:17:43,280 --> 00:17:47,240
Speaker 3: blow away the market. I've fully acknowledged that their investors.

337
00:17:46,880 --> 00:17:49,280
Speaker 2: And his track record has shown years it's not bad

338
00:17:49,320 --> 00:17:53,399
Speaker 2: the lights out right, it's exactly not necessarily consistent, but

339
00:17:54,040 --> 00:17:57,800
Speaker 2: mostly pretty good years and a handful of spectacular.

340
00:17:57,280 --> 00:17:58,640
Speaker 4: Some flashes of genius. Right.

341
00:17:58,720 --> 00:18:01,639
Speaker 3: So, like, that's why people are buying into these things

342
00:18:01,720 --> 00:18:05,320
Speaker 3: is because they believe in this case, for you, Purring Square,

343
00:18:05,400 --> 00:18:08,400
Speaker 3: they believe in Actman and his prowess and his access

344
00:18:08,440 --> 00:18:11,840
Speaker 3: to insight information quote unquote or his access to insight

345
00:18:11,920 --> 00:18:14,359
Speaker 3: that other people aren't getting in the case of something

346
00:18:14,440 --> 00:18:17,320
Speaker 3: like USVC, I think what they're counting on is, oh,

347
00:18:17,440 --> 00:18:20,120
Speaker 3: those are the Angel List guys. They're getting to see

348
00:18:20,160 --> 00:18:22,840
Speaker 3: all of this deal flow from Silicon Valley way before

349
00:18:22,880 --> 00:18:26,080
Speaker 3: everybody else. USVC is going to get these nice little

350
00:18:26,119 --> 00:18:29,120
Speaker 3: slugs of whatever the next SpaceX or the next big

351
00:18:29,200 --> 00:18:32,520
Speaker 3: IPO is going to be way before anybody else. That's

352
00:18:32,560 --> 00:18:35,920
Speaker 3: not insane, right, I mean, I have some private investments

353
00:18:36,000 --> 00:18:38,440
Speaker 3: of my own. I've choosen to be much more careful

354
00:18:38,440 --> 00:18:40,720
Speaker 3: and pick exactly what I want to do. But I'm

355
00:18:40,760 --> 00:18:42,720
Speaker 3: not going to sit here and tell people private investing

356
00:18:42,800 --> 00:18:45,520
Speaker 3: is a terrible idea. Lots of people who made lots

357
00:18:45,520 --> 00:18:49,520
Speaker 3: of money doing it. So that's the allure is, Hey, USVC,

358
00:18:49,800 --> 00:18:52,280
Speaker 3: once they finally let people's money and then start investing,

359
00:18:52,960 --> 00:18:56,359
Speaker 3: maybe they will in fact carry the whole tailwind of

360
00:18:56,400 --> 00:18:59,840
Speaker 3: everything going on in Silicon Valley venture and you're five

361
00:19:00,119 --> 00:19:02,720
Speaker 3: dollar becomes five thousand dollars.

362
00:19:02,760 --> 00:19:03,760
Speaker 4: It's not impossible.

363
00:19:04,440 --> 00:19:07,840
Speaker 2: Here's the math on private investing that I think a

364
00:19:07,840 --> 00:19:13,800
Speaker 2: lot of people overlook. The median fund it does okay,

365
00:19:15,119 --> 00:19:17,159
Speaker 2: doesn't do great. You're better off in the S and P.

366
00:19:17,920 --> 00:19:22,520
Speaker 2: It's expensive, and it's a liquid versus the SMP. But

367
00:19:22,600 --> 00:19:27,720
Speaker 2: a top decile fund does really well, diversified, non correlated

368
00:19:27,760 --> 00:19:32,200
Speaker 2: and very often outperforms the index. The problem is unless

369
00:19:32,240 --> 00:19:34,800
Speaker 2: you get into that I'll be generous and say top

370
00:19:34,920 --> 00:19:39,920
Speaker 2: quartile fund the performance the juice isn't worth the squeeze.

371
00:19:40,160 --> 00:19:44,160
Speaker 2: I love that expression. So given all of that, how

372
00:19:44,200 --> 00:19:48,359
Speaker 2: do you think regulators should be treating this private exposure

373
00:19:48,400 --> 00:19:50,280
Speaker 2: in these various public rappers.

374
00:19:51,200 --> 00:19:54,240
Speaker 3: Well, so, my two big issues are liquidity and transparency.

375
00:19:55,119 --> 00:19:58,640
Speaker 3: I think we should enforce the liquidity rules, right, which

376
00:19:58,680 --> 00:20:00,840
Speaker 3: means that if you're sticking something in like an ETF,

377
00:20:01,480 --> 00:20:03,679
Speaker 3: you should not be able to violate the fifteen percent.

378
00:20:03,760 --> 00:20:05,359
Speaker 3: If you cannot trade it and get a price on

379
00:20:05,440 --> 00:20:08,159
Speaker 3: it intraday, it is not liquid and you should not

380
00:20:08,240 --> 00:20:11,320
Speaker 3: count it as liquid. So step one, we should actually

381
00:20:11,440 --> 00:20:13,480
Speaker 3: enforce those liquidity rules.

382
00:20:13,160 --> 00:20:16,199
Speaker 2: Intra day, meaning once a day or any time throughout

383
00:20:16,240 --> 00:20:16,640
Speaker 2: the day.

384
00:20:16,720 --> 00:20:18,000
Speaker 4: Well, you've got to at least be able to do

385
00:20:18,000 --> 00:20:19,440
Speaker 4: it once a day, okay.

386
00:20:19,200 --> 00:20:23,160
Speaker 3: And I would argue holding an intra day priced vehicle,

387
00:20:24,400 --> 00:20:26,680
Speaker 3: you should probably be holding most of your assets in

388
00:20:26,720 --> 00:20:30,800
Speaker 3: intra day price securities. Eighty yeah, eighty five percent, right,

389
00:20:30,880 --> 00:20:33,919
Speaker 3: So like that seems pretty rational, and then you know

390
00:20:34,000 --> 00:20:36,400
Speaker 3: the other you know, so that's the that's the liquidity

391
00:20:36,440 --> 00:20:38,840
Speaker 3: side of it, and then the transparency side of it. Look,

392
00:20:38,920 --> 00:20:42,040
Speaker 3: the problem in private equity and private credit. As everybody

393
00:20:42,200 --> 00:20:43,879
Speaker 3: knows who's played in any of this, is that the

394
00:20:43,960 --> 00:20:47,200
Speaker 3: marks don't matter, right. I mean, we've all seen those,

395
00:20:48,119 --> 00:20:51,080
Speaker 3: those those pitch books that say, look, you should invest

396
00:20:51,119 --> 00:20:54,240
Speaker 3: in privates. They're so stable they hardly ever go up

397
00:20:54,359 --> 00:20:54,760
Speaker 3: or down.

398
00:20:55,040 --> 00:20:59,280
Speaker 2: I love I Love Cliff Astness calls that volatility laundry,

399
00:20:59,400 --> 00:21:01,280
Speaker 2: and it's exactly to perfect phrase.

400
00:21:01,440 --> 00:21:01,640
Speaker 4: Right.

401
00:21:01,680 --> 00:21:06,120
Speaker 3: So you're taking what would obviously be wildly volaile assets

402
00:21:06,119 --> 00:21:08,440
Speaker 3: and you're marking them once a quarter, and you're marking them,

403
00:21:08,520 --> 00:21:10,720
Speaker 3: you know, based on a lower vall metric on what

404
00:21:10,840 --> 00:21:14,119
Speaker 3: it's comps did. So of course those are ridiculous and

405
00:21:14,320 --> 00:21:17,480
Speaker 3: stupid marks. So that would be the next thing I

406
00:21:17,520 --> 00:21:21,520
Speaker 3: would focus on is independent valuation agents for anything that

407
00:21:21,600 --> 00:21:24,120
Speaker 3: is going to touch the public hand, right, if it's

408
00:21:24,119 --> 00:21:25,600
Speaker 3: not in a prime, if it's not in a limited

409
00:21:25,640 --> 00:21:28,120
Speaker 3: partnership where you've got your own governing documents, if you're

410
00:21:28,119 --> 00:21:31,840
Speaker 3: going to touch the nineteen forty Act, we said independent verification,

411
00:21:31,960 --> 00:21:35,040
Speaker 3: and we should at least publish valuation rules. That's the

412
00:21:35,119 --> 00:21:38,080
Speaker 3: other big one is that they don't tell you how

413
00:21:38,119 --> 00:21:40,679
Speaker 3: they value any of these things. That's the board. The

414
00:21:40,720 --> 00:21:43,800
Speaker 3: board values whether or not your private thing is worth

415
00:21:43,960 --> 00:21:44,439
Speaker 3: X or Y.

416
00:21:45,240 --> 00:21:46,080
Speaker 4: I don't like that.

417
00:21:46,200 --> 00:21:48,359
Speaker 3: I would like to know the rules. Why do you

418
00:21:48,400 --> 00:21:50,760
Speaker 3: think SpaceX is worth one hundred and eighty five dollars

419
00:21:50,840 --> 00:21:51,800
Speaker 3: instead of five hundred?

420
00:21:52,320 --> 00:21:57,439
Speaker 2: Huh really really, really fascinating. Last question, five years from now?

421
00:21:58,080 --> 00:22:04,080
Speaker 2: How do you think this public private distinction, these public

422
00:22:04,080 --> 00:22:10,199
Speaker 2: wrappers around private investments? I love the phrase liquid alts

423
00:22:10,760 --> 00:22:15,360
Speaker 2: kind of reminds me of the George Carlin word routine jumbo.

424
00:22:14,880 --> 00:22:16,520
Speaker 4: Shrimp military intelligence.

425
00:22:16,640 --> 00:22:20,840
Speaker 2: Right exactly, that's the exact routine. Listen, either it's private

426
00:22:20,880 --> 00:22:23,879
Speaker 2: and ill liquid or public in liquid, but private and

427
00:22:23,960 --> 00:22:26,840
Speaker 2: liquid doesn't really at that point, it might as well

428
00:22:26,880 --> 00:22:29,520
Speaker 2: be public. Doesn't make any sense. How do you think

429
00:22:29,600 --> 00:22:32,159
Speaker 2: this distinction is going to show up in the minds

430
00:22:32,160 --> 00:22:35,440
Speaker 2: of investors and or regulators?

431
00:22:36,119 --> 00:22:39,840
Speaker 3: I feel I don't want to be doomberg about this,

432
00:22:40,560 --> 00:22:43,080
Speaker 3: but I feel fairly confident suggesting we're going to have

433
00:22:43,400 --> 00:22:47,199
Speaker 3: some event in the next couple of years which is

434
00:22:47,280 --> 00:22:50,200
Speaker 3: going to like pull the scales off our eyes around.

435
00:22:50,560 --> 00:22:53,520
Speaker 2: Haven't we kind of had those sort of events already

436
00:22:53,600 --> 00:22:58,760
Speaker 2: this year, We've had a bunch of privates.

437
00:22:57,320 --> 00:23:00,679
Speaker 3: Very very thin like blue owls like in your BBC

438
00:23:00,880 --> 00:23:01,680
Speaker 3: for redemptions.

439
00:23:01,720 --> 00:23:04,280
Speaker 4: That's pretty that's that's right, that's course of business.

440
00:23:04,359 --> 00:23:08,080
Speaker 2: You're talking not quite GFC, but in the same neighborhood.

441
00:23:08,600 --> 00:23:10,840
Speaker 3: Yeah, I think we're going to have a few funds

442
00:23:11,440 --> 00:23:15,520
Speaker 3: really have to to, you know, either close, whether it's

443
00:23:15,520 --> 00:23:19,720
Speaker 3: a high profile private equity fund unwinding, whether it's some

444
00:23:19,800 --> 00:23:22,720
Speaker 3: of the private credit stuff really coming home to roost. Now,

445
00:23:22,880 --> 00:23:25,399
Speaker 3: initially it looks like we may have dodged some of that,

446
00:23:25,600 --> 00:23:27,560
Speaker 3: Like the private credit stuff. I think there was a

447
00:23:27,560 --> 00:23:29,240
Speaker 3: lot of concern that that was going to blow up

448
00:23:29,280 --> 00:23:31,879
Speaker 3: the world. We seem to be being a little more

449
00:23:32,000 --> 00:23:35,439
Speaker 3: rational about that. On the private equity side. You know,

450
00:23:35,520 --> 00:23:37,719
Speaker 3: I think most of the money going into private equity

451
00:23:37,760 --> 00:23:41,080
Speaker 3: is pretty high risk tolerance money anyway. So until we

452
00:23:41,280 --> 00:23:43,919
Speaker 3: actually cross that rubicon of shoving this stuff in four

453
00:23:44,000 --> 00:23:46,080
Speaker 3: o one k's, which I think is still going to

454
00:23:46,080 --> 00:23:48,200
Speaker 3: be a while out, I don't think that's happening tomorrow.

455
00:23:48,400 --> 00:23:51,280
Speaker 2: I hope that's a very far out.

456
00:23:51,520 --> 00:23:51,760
Speaker 4: Yeah.

457
00:23:51,800 --> 00:23:55,040
Speaker 3: So I think we'll have some high profile blow ups,

458
00:23:55,080 --> 00:23:57,680
Speaker 3: but I think that they will be they'll be good

459
00:23:57,760 --> 00:24:00,000
Speaker 3: for investors in the sense that they will wake us

460
00:24:00,119 --> 00:24:02,520
Speaker 3: up and will be more skeptical, which I think is

461
00:24:02,520 --> 00:24:04,919
Speaker 3: what's happened with private credit? There is not billions and

462
00:24:04,920 --> 00:24:07,679
Speaker 3: billions and billions of dollars chasing private credit from retail

463
00:24:07,720 --> 00:24:09,000
Speaker 3: right now, that's a good thing.

464
00:24:09,600 --> 00:24:10,719
Speaker 4: I think we dodged a bullet.

465
00:24:10,800 --> 00:24:13,960
Speaker 2: Well, well, there certainly was billions of dollars chasing.

466
00:24:14,320 --> 00:24:17,200
Speaker 4: Twenty four and five millions. That's right.

467
00:24:17,280 --> 00:24:21,120
Speaker 2: So to wrap up, for those of you interested in

468
00:24:21,240 --> 00:24:24,920
Speaker 2: everything from liquid alts to interval funds, to M and

469
00:24:25,000 --> 00:24:28,600
Speaker 2: A funds to what have you, you have to be

470
00:24:28,680 --> 00:24:33,360
Speaker 2: aware of the downside risks. These things tend to be expensive.

471
00:24:33,840 --> 00:24:38,040
Speaker 2: They often trade at a discount, assuming they trade at all.

472
00:24:38,160 --> 00:24:42,160
Speaker 2: They are not especially transparent. There is a lot of

473
00:24:42,359 --> 00:24:45,320
Speaker 2: good faith in relying on management to tell you what

474
00:24:45,480 --> 00:24:50,679
Speaker 2: these things are worth. No conflicts there, and generally speaking,

475
00:24:51,560 --> 00:24:55,320
Speaker 2: they seem to operate at a on a very different

476
00:24:55,400 --> 00:25:01,080
Speaker 2: plane than publicly traded stocks and bonds. I'm Barry Ridolts.

477
00:25:01,240 --> 00:25:12,399
Speaker 2: You're listening to Bloomberg's at the Money m