Becker Private Equity & Business Podcast
Why Money Managers Are Pushing Private Equity 3-8-25
Sat, 08 Mar 2025
In this episode, Scott Becker explores why money managers are increasingly steering investors toward private equity.
Chapter 1: Why are money managers pushing private equity?
This is Scott Becker with the Becker Private Equity and Business Podcast. So today's discussion is around money managers. Why are all the money managers pushing investment in private equity vehicles and similar vehicles? And this is a fascinating discussion. And it's really the same reason why you see companies like BlackRock trying to move towards private equity, not just the public markets.
Chapter 2: What are the real reasons behind this trend?
So there's many things at play here, but there's two, one that's real and one that's self-interest. The first real one is that. There's only so much availability of public companies to invest in, and thus to have full exposure to the markets, to be able to even out returns over time, you probably need some exposure to private equities and to private investments.
Chapter 3: Are all private investments created equal?
Chapter 4: How should investors approach private investments?
But private investments are not all made equal. They are all over the board. Some good, some bad. I recently had another private investment that lost everything. So there's just a mix out there, and you have to be very careful in the private investment world. But why this morning when I talked about allocation of assets, I hear from two different money managers about private investments.
And again, one is that reason that it's actually an important part of the portfolio. The second reason is all the investment managers
do okay on bonds they do better in equities and they do even better in terms of their incentive structure on private investments and private equities thus there's a sort of this ladder of what they get paid in the commission structure it's why blackstone is so much more valuable than black rock even though blackstone holds about a tenth of the assets that black rock holds because the business is a more profitable business
with generally the 2% and 20% structure, whereas in traditional money management, you're looking at less than 100 basis points. So again, there's reality and there's self-interest, a lot of reasons why the money managers are after the private equity dollars too. Thank you for listening to the Becker Private Equity and Business Podcast.
If you have any questions about this or want to discuss it, feel free at any time to contact Scott Becker, 773-766-5322. Thank you very much for listening to the Becker Private Equity and Business Podcast.
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