January 15, 2025 • 15 mins
Hedge funds, venture capital, private equity, and private credit have never been more popular. Investors have lots of questions when allocating to these asset classes: How much capital do you need? What percentage of your portfolio should be allocated? Ted Seides is founder and CIO of Capital Allocators, and learned about alts working under the legendary David Swensen at the Yale University Investments Office. He wrote the book, “Private Equity Deals: Lessons in investing, dealmaking and operations.”
Each week, “At the Money” discusses an important topic in money management. From portfolio construction to taxes and cutting down on fees, join Barry Ritholtz to learn the best ways to put your money to work.
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Episode Transcript
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Speaker 1 (00:02):
Bloomberg Audio Studios, podcasts, radio news Outside Hello, hedge funds,
(00:24):
Venture Kappa, private equity, private credit. Allocating capital to alternatives
has never been more popular or more challenging. How should
investors approach these asset classes? I'm Barry Ridholts, and on
today's edition of At the Money, we're going to discuss
how investors should think about alternative investments. To help us
(00:46):
unpack all of this and what it means for your portfolio,
Let's bring in Ted Sidies, who began his career at
the Yale University Investments Office under the legendary David Swinson.
He's founder and CIO of Capital Allocator, and since twenty
seventeen has hosted a podcast by that same name. His
latest book is Private Equity Deals Lessons in Investing, deal
(01:08):
Making and Operations from Private Equity Professionals, is out now.
So Ted, let's start with the basics. What is the
appeal of alternatives?
Speaker 2 (01:18):
If you start with let's call it a traditional portfolio
of stocks and bonds, the idea of adding alternatives is
to improve the quality of your portfolio, meaning you're trying
to get the highest turns you can with the similar
level of risk or sometimes the same kind of returns
with a reduced level of risk, and bringing in these
(01:40):
other alternatives help you do that.
Speaker 1 (01:41):
All right, So there I mentioned a run of different alternatives.
How do you distinguish between private equity, private credit, hedge funds,
venture capital? Lots of different types of alts. How do
you think about these?
Speaker 2 (01:54):
Each of them have their own different risk and reward characteristics.
That's probably the easiest way to think about it. If
you go from a spectrum private credit, think about it.
It's the same as bonds, a little bit different. Hedge
funds can be like bonds or stocks a little bit different.
Then you get into private equity, which is kind of
a little bit of juiced stock portfolio, and venture capital
(02:17):
is the riskiest of them all.
Speaker 1 (02:19):
So you're discussing risk there. Let's talk about reward. What
sort of return expectations should investors have for these different
asset classes?
Speaker 2 (02:28):
Well, similarly, private credit, think about a bond portfolio with
credit risk and a little bit of illiquidity. So that's
bonds plus is it bonds plus two hundred basis points?
Maybe something like that. Hedge funds generally have either bond
like or stock like characteristics with less risk. Private equity
you should expect a premium over stocks and venture capital
(02:50):
a premium over that because of the early stage risk.
Speaker 1 (02:53):
Huh, those are really kind of interesting. You mentioned illiquidity.
Let's talk a little bit about the illiquidity pre What
does that mean for investors? What's involved with that?
Speaker 2 (03:04):
When you start with just traded stocks and bonds, you
can get out instantaneously. So if you're going to commit
your capital to any of these other categories, you have
to embrace some illiquidity. Meaning if you want to get
out in that moment, it's going to cost you. So
to take on that risk, you need some type of
(03:25):
extra return, otherwise it wouldn't make sense to do it.
So the concept of an illiquidity premium is that in
order to pursue these strategies that prevent you from accessing
your money instantaneously, you need to get paid for that.
Speaker 1 (03:39):
So where does the illiquidity premium come from? My assumption
was because this is so much smaller than public markets,
with so many fewer investors, perhaps there are some inefficiencies
that these managers can identify. Any truth of that.
Speaker 2 (03:56):
It depends on the strategy. That would be the story
with hedge funds. Sure, when you get into private equity
venture capital, it's always in price. So if you're getting
the same asset that's in the public markets or the
private markets, in theory, you should want to buy it
at a discount in the private markets because you can't
get your money out quickly, and that's where you would
(04:17):
see that premium.
Speaker 1 (04:19):
And so, since we're talking about lockups and not being
able to get liquid except at very specific times, how
long should investors expect to lock up their capital in
each of these alternatives.
Speaker 2 (04:31):
It depends on the strategy and whether you're investing directly
in these securities or let's just say you're in funds.
So private credit can vary, but oftentimes you may not
get the liquidity until the assets are liquidated.
Speaker 1 (04:42):
So that could be anywhere from five to ten years.
Speaker 2 (04:44):
It can be Hedge funds often are quarterly liquidity, depending
on the underlying you get into a private equity or
venture capital fund, now you're generally talking about ten to
fifteen years.
Speaker 1 (04:56):
Because you have to wait for that private company to
have some liquidity of to free up the cash.
Speaker 2 (05:01):
And on top of that, if you're investing in a fund,
you have to wait for the fund manager to find
the company. So you're committing your capital, they find the company,
they might own it for say three to eight years,
and then you're waiting to get the cash back.
Speaker 1 (05:14):
Huh. That's really that's really kind of intriguing, all right.
So when investors interested in alts, how much capital do
they need before they can start seriously looking at the space?
Is this for five million dollar portfolios or fifty million
dollar portfolios?
Speaker 2 (05:30):
It's changing a lot to move to smaller numbers. So
if I go back to when I started in this,
you didn't have kind of pooled alternatives. I think about
fund of funds or all this movement of the democratization
of alts, and a minimum might be a million dollars
for a single fund. If you want a diversification, and
you wanted to say ten different funds, Now you're talking
about ten million, and if that's only ten percent of
(05:52):
your portfolio, you're looking at one hundred million dollars just
to make it.
Speaker 1 (05:55):
Those are big numbers.
Speaker 2 (05:56):
Those are big numbers. That has changed a lot, and
now you're starting to see more and more products available
at you know, rather than a million dollar minimum, maybe
it's fifty thousand dollars or even less. So it's a
little bit less. What size I mean you do need
to have, you know, is it five million, is a
ten million? I don't really know.
Speaker 1 (06:18):
The goal, but it's not five hundred thousand dollars.
Speaker 2 (06:20):
It's not five hundred thousand dollars.
Speaker 1 (06:22):
Right, So, and you were saying the goal is, well,
the goal is.
Speaker 2 (06:25):
To get access to some of these areas, hopefully in
a very high quality way, and have some diversification within
the strategy that you're pursuing, and that does take some capital.
Speaker 1 (06:35):
So you just set something really interesting before ten different
funds and a million dollars each out of one hundred
million dollars. You're implying that investors should allocate a certain percentage.
So let me rather than use that example, let me
just ask that directly, how much in the alt and
private space should investors think about allocating in order to
(07:00):
generate potentially better returns and increase their diversification.
Speaker 2 (07:05):
It's entirely a function of let's say, a liquidity budget. So,
as you mentioned it, you need to lock up your capital,
particularly when you're getting into private equity and venture capital,
and that means you can't access it. So if someone
has enough money that they don't really need to access.
(07:25):
You know, if you have one hundred million dollars, you're
probably not accessing most of that year to year. And
you've seen in some of the most sophisticated institutions all
these alts get up to fifty percent of their portfolio.
If you're talking about maybe you have five million to invest,
it's not clear you want to take half of that
and put it away so that you can't access it
(07:45):
in case you need the capital in between now and
fifteen years from now.
Speaker 1 (07:49):
So a phrase I heard that kind of made me
a giggle, but I want to share it with you.
Sixty forty is now fifty thirty, twenty or some variation
to that effect. What are your thoughts on that.
Speaker 2 (08:02):
I think about it a little bit differently, which is
most of the time you want to think about the
risk and return of the overall and you can break
that down into stockbond risk. So whether that's sixty forty
or seventy thirty, that's fine. The question with alts is
how do you want to take that risk? So rather
than in a seventy thirty having seventy percent in US stocks, yeah,
(08:24):
you may want to say, hey, maybe twenty percent of
that should be in private equity. You have similar risk,
but you have a different type of return stream and
hopefully a little more octane.
Speaker 1 (08:34):
That's kind of interesting. Let's talk about fees. It used
to be that two and twenty two percent of the
underlying investment plus twenty percent of the that gains was
the standard. What are standard fees in the old space today?
Speaker 2 (08:51):
It is a function a little bit of that return characteristic.
So if you get to the higher octane private equity,
venture capital, you generally do still see two and twenty
hedge funds and private credit it tends to be a
little bit less than that. But make no mistake about it,
the fees are higher in the alternatives than they are
in the traditional world.
Speaker 1 (09:08):
How should investors go about finding alternative managers and evaluating
their funds?
Speaker 2 (09:14):
So this is incredibly important because unlike in the stock
and bond markets, the dispersion of returns and alts is
much much wider, Meaning if you find a good manager
it matters a lot more than if you find a
good stock manager a good bond manager Cumbersely, if you
find a bad one it hurts you much more. Than
if you're hurt by stock and bond. So how do
(09:35):
you do it? It does take a fair amount of
research and either a trusted advisor or someone who knows
the space. There's a lot of different ways to get
involved in that. One of the ways you're seeing more
and more as all to get democratized is the bigger
brands are creating products. You can go to Blackstone and
(09:56):
you'll be fine. I don't know if you'll get the
best returns, but you're not going to get the worst returns.
And so one way that people think about participating is
you look at who these larger public alternative managers are.
It's a Blackstone, Ares, Apollo, KKR, TPG. These are super
high quality investment organizations.
Speaker 1 (10:17):
How do you gain entry to the best funds? A
lot of you know, it's a little bit like the
old Groucho Marx joke. I wouldn't want to be a
member of any club that would have me. The funds
you want to get into the most very often require
giant minimums because they're working with foundations and endowments, and
(10:37):
very often they're either closed or there's a giant queue
to get into them. How does one go about establishing
a relationship ps. All these questions come right from your book.
But how do you go about establishing a relationship with
the potential alternative funds that you might want to have
exposure to?
Speaker 2 (10:55):
Yeah, it's really hard, particularly as an individual. If you think
about it, you're competing with all of those very well
resourced institutions and down its foundations, pension funds that have people,
well compensated people that are out looking for these funds.
So the question you have to ask is what are
(11:16):
you trying to accomplish? And that can be different for
different people, different organizations, but generally speaking, it does require
working into networks where you start to learn who the
players are and trying to figure out from that who
are the better ones. It takes a lot of time
to do that well.
Speaker 1 (11:37):
So if someone wants some assistance in building out the
alternative portion of their portfolios, where do they begin looking?
How do they go find that sort of those sort
of resources.
Speaker 2 (11:51):
Usually the first step comes from the fund to funds world,
and you could look at as a great example, Vanguard
Now as part of their retirement package, did a deal
with harbor Vest. Harbor Vest is one of the leading
fund of funds to allow entry to get good quality exposure.
So a harbor Vest, a Hamilton Lane, Stepstone, some of
(12:13):
these are some of the bigger established, say private equity
fund of funds. They do a very good job of
getting people access to high quality exposure.
Speaker 1 (12:22):
Huh So if you're a four to one k at Vanguard,
do you have access to that or is that just
broad portfolios?
Speaker 2 (12:31):
I know it exists within their suite. I'm not sure
if it's part of their target funds or you can
directly access.
Speaker 1 (12:38):
So what are some of the bigger challenges and misconceptions
about investing in alternatives?
Speaker 2 (12:44):
Well, the biggest misconceptions come from the public perception of
it because most of the time in the news you
only read about sensationalization. You read about huge returns and
big failures in almost all the cases. Set a side
venture capital, because venture capital is designed to have huge
successes and failures. All the action happens in the middle.
(13:07):
Like hedge funds generally speaking, are very boring, they're not newsworthy.
They shouldn't make the news. Private credits the same way.
There will be a time in private credit where there
are defaults, and you'll read about defaults but you probably
won't read that the returns are just fine even with
the defaults.
Speaker 1 (13:24):
So how do investors go about doing some due diligence
on the funds they're interested in? How do they make
sure they're getting what they expect to get.
Speaker 2 (13:34):
A lot of it starts with meeting the people and
trying to understand what is their philosophy, what is their strategy,
and how do they go about deal making. You then
can get into the data. So any of these firms
that's been around, they've done deals in the past, and
you could try to figure out how do they add value?
Do they buy well, do they run the companies well,
(13:55):
do they sell well? Is it financial leverage? And then
trying to figure out what do you think works and
is that a fit with how that firm pursues investing
really interesting.
Speaker 1 (14:06):
So to wrap up, investors who have a long time horizon,
a substantial portfolio, the time effort and interest in exploring
the alternative space may want to pull some modest percentage
of their holdings aside and locking these up for an
extended period with the hope of getting a better than
(14:28):
average return on a diversified basis or an average return
on a lower risk basis. Start out by looking at
some of the bigger names in the space that Ted
had mentioned. Do your homework and your due diligence. Go
into this with open eyes and make sure that you
are not allocating too much capital to a space that
(14:52):
might be locked up for five or ten years or more.
Successful alternative investors have been rewarded with outstanding returns. Unsuccessful
ones have underperformed the public markets. I'm Barry Ritholtz and
this is Bloomberg's at the Money.
Speaker 2 (15:12):
Arm outside of Girl Grown Russ
Bloomberg Audio Studios, podcasts, radio news Outside Hello, hedge funds,
(00:24):
Venture Kappa, private equity, private credit. Allocating capital to alternatives
has never been more popular or more challenging. How should
investors approach these asset classes? I'm Barry Ridholts, and on
today's edition of At the Money, we're going to discuss
how investors should think about alternative investments. To help us
(00:46):
unpack all of this and what it means for your portfolio,
Let's bring in Ted Sidies, who began his career at
the Yale University Investments Office under the legendary David Swinson.
He's founder and CIO of Capital Allocator, and since twenty
seventeen has hosted a podcast by that same name. His
latest book is Private Equity Deals Lessons in Investing, deal
(01:08):
Making and Operations from Private Equity Professionals, is out now.
So Ted, let's start with the basics. What is the
appeal of alternatives?
Speaker 2 (01:18):
If you start with let's call it a traditional portfolio
of stocks and bonds, the idea of adding alternatives is
to improve the quality of your portfolio, meaning you're trying
to get the highest turns you can with the similar
level of risk or sometimes the same kind of returns
with a reduced level of risk, and bringing in these
(01:40):
other alternatives help you do that.
Speaker 1 (01:41):
All right, So there I mentioned a run of different alternatives.
How do you distinguish between private equity, private credit, hedge funds,
venture capital? Lots of different types of alts. How do
you think about these?
Speaker 2 (01:54):
Each of them have their own different risk and reward characteristics.
That's probably the easiest way to think about it. If
you go from a spectrum private credit, think about it.
It's the same as bonds, a little bit different. Hedge
funds can be like bonds or stocks a little bit different.
Then you get into private equity, which is kind of
a little bit of juiced stock portfolio, and venture capital
(02:17):
is the riskiest of them all.
Speaker 1 (02:19):
So you're discussing risk there. Let's talk about reward. What
sort of return expectations should investors have for these different
asset classes?
Speaker 2 (02:28):
Well, similarly, private credit, think about a bond portfolio with
credit risk and a little bit of illiquidity. So that's
bonds plus is it bonds plus two hundred basis points?
Maybe something like that. Hedge funds generally have either bond
like or stock like characteristics with less risk. Private equity
you should expect a premium over stocks and venture capital
(02:50):
a premium over that because of the early stage risk.
Speaker 1 (02:53):
Huh, those are really kind of interesting. You mentioned illiquidity.
Let's talk a little bit about the illiquidity pre What
does that mean for investors? What's involved with that?
Speaker 2 (03:04):
When you start with just traded stocks and bonds, you
can get out instantaneously. So if you're going to commit
your capital to any of these other categories, you have
to embrace some illiquidity. Meaning if you want to get
out in that moment, it's going to cost you. So
to take on that risk, you need some type of
(03:25):
extra return, otherwise it wouldn't make sense to do it.
So the concept of an illiquidity premium is that in
order to pursue these strategies that prevent you from accessing
your money instantaneously, you need to get paid for that.
Speaker 1 (03:39):
So where does the illiquidity premium come from? My assumption
was because this is so much smaller than public markets,
with so many fewer investors, perhaps there are some inefficiencies
that these managers can identify. Any truth of that.
Speaker 2 (03:56):
It depends on the strategy. That would be the story
with hedge funds. Sure, when you get into private equity
venture capital, it's always in price. So if you're getting
the same asset that's in the public markets or the
private markets, in theory, you should want to buy it
at a discount in the private markets because you can't
get your money out quickly, and that's where you would
(04:17):
see that premium.
Speaker 1 (04:19):
And so, since we're talking about lockups and not being
able to get liquid except at very specific times, how
long should investors expect to lock up their capital in
each of these alternatives.
Speaker 2 (04:31):
It depends on the strategy and whether you're investing directly
in these securities or let's just say you're in funds.
So private credit can vary, but oftentimes you may not
get the liquidity until the assets are liquidated.
Speaker 1 (04:42):
So that could be anywhere from five to ten years.
Speaker 2 (04:44):
It can be Hedge funds often are quarterly liquidity, depending
on the underlying you get into a private equity or
venture capital fund, now you're generally talking about ten to
fifteen years.
Speaker 1 (04:56):
Because you have to wait for that private company to
have some liquidity of to free up the cash.
Speaker 2 (05:01):
And on top of that, if you're investing in a fund,
you have to wait for the fund manager to find
the company. So you're committing your capital, they find the company,
they might own it for say three to eight years,
and then you're waiting to get the cash back.
Speaker 1 (05:14):
Huh. That's really that's really kind of intriguing, all right.
So when investors interested in alts, how much capital do
they need before they can start seriously looking at the space?
Is this for five million dollar portfolios or fifty million
dollar portfolios?
Speaker 2 (05:30):
It's changing a lot to move to smaller numbers. So
if I go back to when I started in this,
you didn't have kind of pooled alternatives. I think about
fund of funds or all this movement of the democratization
of alts, and a minimum might be a million dollars
for a single fund. If you want a diversification, and
you wanted to say ten different funds, Now you're talking
about ten million, and if that's only ten percent of
(05:52):
your portfolio, you're looking at one hundred million dollars just
to make it.
Speaker 1 (05:55):
Those are big numbers.
Speaker 2 (05:56):
Those are big numbers. That has changed a lot, and
now you're starting to see more and more products available
at you know, rather than a million dollar minimum, maybe
it's fifty thousand dollars or even less. So it's a
little bit less. What size I mean you do need
to have, you know, is it five million, is a
ten million? I don't really know.
Speaker 1 (06:18):
The goal, but it's not five hundred thousand dollars.
Speaker 2 (06:20):
It's not five hundred thousand dollars.
Speaker 1 (06:22):
Right, So, and you were saying the goal is, well,
the goal is.
Speaker 2 (06:25):
To get access to some of these areas, hopefully in
a very high quality way, and have some diversification within
the strategy that you're pursuing, and that does take some capital.
Speaker 1 (06:35):
So you just set something really interesting before ten different
funds and a million dollars each out of one hundred
million dollars. You're implying that investors should allocate a certain percentage.
So let me rather than use that example, let me
just ask that directly, how much in the alt and
private space should investors think about allocating in order to
(07:00):
generate potentially better returns and increase their diversification.
Speaker 2 (07:05):
It's entirely a function of let's say, a liquidity budget. So,
as you mentioned it, you need to lock up your capital,
particularly when you're getting into private equity and venture capital,
and that means you can't access it. So if someone
has enough money that they don't really need to access.
(07:25):
You know, if you have one hundred million dollars, you're
probably not accessing most of that year to year. And
you've seen in some of the most sophisticated institutions all
these alts get up to fifty percent of their portfolio.
If you're talking about maybe you have five million to invest,
it's not clear you want to take half of that
and put it away so that you can't access it
(07:45):
in case you need the capital in between now and
fifteen years from now.
Speaker 1 (07:49):
So a phrase I heard that kind of made me
a giggle, but I want to share it with you.
Sixty forty is now fifty thirty, twenty or some variation
to that effect. What are your thoughts on that.
Speaker 2 (08:02):
I think about it a little bit differently, which is
most of the time you want to think about the
risk and return of the overall and you can break
that down into stockbond risk. So whether that's sixty forty
or seventy thirty, that's fine. The question with alts is
how do you want to take that risk? So rather
than in a seventy thirty having seventy percent in US stocks, yeah,
(08:24):
you may want to say, hey, maybe twenty percent of
that should be in private equity. You have similar risk,
but you have a different type of return stream and
hopefully a little more octane.
Speaker 1 (08:34):
That's kind of interesting. Let's talk about fees. It used
to be that two and twenty two percent of the
underlying investment plus twenty percent of the that gains was
the standard. What are standard fees in the old space today?
Speaker 2 (08:51):
It is a function a little bit of that return characteristic.
So if you get to the higher octane private equity,
venture capital, you generally do still see two and twenty
hedge funds and private credit it tends to be a
little bit less than that. But make no mistake about it,
the fees are higher in the alternatives than they are
in the traditional world.
Speaker 1 (09:08):
How should investors go about finding alternative managers and evaluating
their funds?
Speaker 2 (09:14):
So this is incredibly important because unlike in the stock
and bond markets, the dispersion of returns and alts is
much much wider, Meaning if you find a good manager
it matters a lot more than if you find a
good stock manager a good bond manager Cumbersely, if you
find a bad one it hurts you much more. Than
if you're hurt by stock and bond. So how do
(09:35):
you do it? It does take a fair amount of
research and either a trusted advisor or someone who knows
the space. There's a lot of different ways to get
involved in that. One of the ways you're seeing more
and more as all to get democratized is the bigger
brands are creating products. You can go to Blackstone and
(09:56):
you'll be fine. I don't know if you'll get the
best returns, but you're not going to get the worst returns.
And so one way that people think about participating is
you look at who these larger public alternative managers are.
It's a Blackstone, Ares, Apollo, KKR, TPG. These are super
high quality investment organizations.
Speaker 1 (10:17):
How do you gain entry to the best funds? A
lot of you know, it's a little bit like the
old Groucho Marx joke. I wouldn't want to be a
member of any club that would have me. The funds
you want to get into the most very often require
giant minimums because they're working with foundations and endowments, and
(10:37):
very often they're either closed or there's a giant queue
to get into them. How does one go about establishing
a relationship ps. All these questions come right from your book.
But how do you go about establishing a relationship with
the potential alternative funds that you might want to have
exposure to?
Speaker 2 (10:55):
Yeah, it's really hard, particularly as an individual. If you think
about it, you're competing with all of those very well
resourced institutions and down its foundations, pension funds that have people,
well compensated people that are out looking for these funds.
So the question you have to ask is what are
(11:16):
you trying to accomplish? And that can be different for
different people, different organizations, but generally speaking, it does require
working into networks where you start to learn who the
players are and trying to figure out from that who
are the better ones. It takes a lot of time
to do that well.
Speaker 1 (11:37):
So if someone wants some assistance in building out the
alternative portion of their portfolios, where do they begin looking?
How do they go find that sort of those sort
of resources.
Speaker 2 (11:51):
Usually the first step comes from the fund to funds world,
and you could look at as a great example, Vanguard
Now as part of their retirement package, did a deal
with harbor Vest. Harbor Vest is one of the leading
fund of funds to allow entry to get good quality exposure.
So a harbor Vest, a Hamilton Lane, Stepstone, some of
(12:13):
these are some of the bigger established, say private equity
fund of funds. They do a very good job of
getting people access to high quality exposure.
Speaker 1 (12:22):
Huh So if you're a four to one k at Vanguard,
do you have access to that or is that just
broad portfolios?
Speaker 2 (12:31):
I know it exists within their suite. I'm not sure
if it's part of their target funds or you can
directly access.
Speaker 1 (12:38):
So what are some of the bigger challenges and misconceptions
about investing in alternatives?
Speaker 2 (12:44):
Well, the biggest misconceptions come from the public perception of
it because most of the time in the news you
only read about sensationalization. You read about huge returns and
big failures in almost all the cases. Set a side
venture capital, because venture capital is designed to have huge
successes and failures. All the action happens in the middle.
(13:07):
Like hedge funds generally speaking, are very boring, they're not newsworthy.
They shouldn't make the news. Private credits the same way.
There will be a time in private credit where there
are defaults, and you'll read about defaults but you probably
won't read that the returns are just fine even with
the defaults.
Speaker 1 (13:24):
So how do investors go about doing some due diligence
on the funds they're interested in? How do they make
sure they're getting what they expect to get.
Speaker 2 (13:34):
A lot of it starts with meeting the people and
trying to understand what is their philosophy, what is their strategy,
and how do they go about deal making. You then
can get into the data. So any of these firms
that's been around, they've done deals in the past, and
you could try to figure out how do they add value?
Do they buy well, do they run the companies well,
(13:55):
do they sell well? Is it financial leverage? And then
trying to figure out what do you think works and
is that a fit with how that firm pursues investing
really interesting.
Speaker 1 (14:06):
So to wrap up, investors who have a long time horizon,
a substantial portfolio, the time effort and interest in exploring
the alternative space may want to pull some modest percentage
of their holdings aside and locking these up for an
extended period with the hope of getting a better than
(14:28):
average return on a diversified basis or an average return
on a lower risk basis. Start out by looking at
some of the bigger names in the space that Ted
had mentioned. Do your homework and your due diligence. Go
into this with open eyes and make sure that you
are not allocating too much capital to a space that
(14:52):
might be locked up for five or ten years or more.
Successful alternative investors have been rewarded with outstanding returns. Unsuccessful
ones have underperformed the public markets. I'm Barry Ritholtz and
this is Bloomberg's at the Money.
Speaker 2 (15:12):
Arm outside of Girl Grown Russ
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