Matt Jarzemsky
speaker
30 appearances
1 recordings
1 series
first heard Aug 2017
last heard Aug 2017
Matt Jarzemsky’s voice in public audio — every appearance, attributed to the second.
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Appearances
It's kind of a mix of things.
We're in the ninth year of this economic expansion, bull market in stocks and other assets that has come along with that.
Now, investors are starting to think that the growth in the economy is getting a little long in the tooth.
And also, as assets keep going higher and higher, they need to start looking at alternatives that are perhaps more attractively valued.
Private equity has been a good performing asset class for the type of investors who typically look at these investments, pensions, sovereign wealth funds, and by and large, big institutions with a lot of money to put to work.
So there's a combination of this is what's worked for them in the past.
And as they look around at kind of the menu of options, this is perhaps less overvalued than some of the other things that they could invest in.
For instance, Apollo Global Management, one of the largest private equity managers, owns the home security company ADT and took host as private a number of years ago, among others.
They recently raised the largest private equity fund ever, nearly $25 billion pool of money raised from investors that they can go out and use to buy companies, fix them up, and then hopefully sell them at a profit.
So just the fact that we've gotten to that point where we're seeing the largest ever of these type of investment products really goes to show how easy it is for these firms to go out and raise these commitments of capital to invest.
That's right.
I mean, the past couple of years, this kind of indexing and passive investing trend has just continued to snowball.
And that's come at the expense of some of your, you know, kind of traditional mutual fund managers and the like.
These, you know, what are known as alternative asset managers who run things like private equity funds and invest in distressed debt, real estate and other sort of more off the run assets.
have nonetheless really continued to grow.
So the way some people characterize it is kind of a barbell.
On one extreme, you have just these very low-cost passive products that just track the market.
On the other hand, you have these very hands-on strategies like private equity, where the investor is actually buying the company and controlling it, doing things to change it and try to affect their own outcome.
Whereas in the middle, you have these kind of stock and bond pickers who
have had a less positive reception to what they're trying to sell lately.
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