The Dawn of Passives in Private Markets

🎙️ Ross Butler speaks with Edward Talmor-Gera, Founder and CEO of NewVest, and Matthew Chapman, Director at NewVest. NewVest is revolutionizing private markets by offering low-cost, diversified index funds for private equity, private debt, and other strategies. In this episode, they discuss NewVest’s innovative approach to providing passive exposure to private markets, challenging traditional private equity practices, and simplifying access to the world’s largest private equity funds.
💡 Why Passive Investing in Private Markets is Revolutionary
Edward explains how indexing reshapes private equity by offering diversified exposure to market averages, which consistently outperform the median. He highlights that 70% of private equity funds underperform the pooled average, making passive strategies both efficient and attractive.
📊 Debunking Myths About Private Equity Performance
The duo addresses the myth that selecting top-performing funds is the only way to succeed. Data reveals limited statistical persistence in fund manager performance, supporting the reliability of index-based strategies.
🚀 NewVest’s Unique Approach
Fund Structure: NewVest charges no management fees, only a low carry.
Access to Top Funds: Investing in the 50 largest private equity and private debt funds each year, including industry leaders like Blackstone, KKR, and Carlyle.
Diversification and Cost Efficiency: Weighted investments according to target fund sizes provide broad exposure while reducing fees and risk compared to active fund selection.
🌍 The Evolution of Private Markets Investing
Matthew emphasizes the complementarity of passive instruments with active strategies, enabling investors to focus on achieving alpha while leveraging index stability for diversification.
🔮 Future Vision for Private Markets
NewVest envisions passive investing becoming as prevalent in private markets as in public markets. Plans include sector-specific and niche indices, such as clean tech and geographic-focused products, as well as indices for first-time funds.
🤝 Aligning Interests and Democratizing Access
Edward highlights how NewVest’s alignment with LPs and innovative model is attracting institutions, family offices, and even individual investors.
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#privateequity #passiveinvesting #privatemarkets #NewVest #privateequitypodcast #alternativeinvestments #diversification #FundShackPodcast
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Fund Shack is a private equity podcast and global media channel for alternative investment professionals 🌍, produced by Linear B Group.
Contact:
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🌐 Linear B Group