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Here are the totals, based on the figures in the post: 10.8% gross for A16Z 14.5% for S&P 500. Calculation: https://imgur.com/a/jeFN8fL
Here are the totals, based on the figures in the post: 10.8% gross for A16Z 14.5% for S&P 500. Calculation: https://imgur.com/a/jeFN8fL
Ok. Picking on a firm because it didn't beat the 500 is harsh. Beating the 500 is damn hard. An 500index fund is basically a collection of large monopolies that extract cash.
Earlier quoted context omitted.
Ok. Picking on a firm because it didn't beat the 500 is harsh. Beating the 500 is damn hard. An 500index fund is basically a collection of large monopolies that extract cash.
Yes, but then why invest in an actively managed fund at all, as an LP? whole premise is that fund managers can beat an index such as the S&P500 or total market etc.
That's why diversification is important
Earlier quoted context omitted.
Ok. Picking on a firm because it didn't beat the 500 is harsh. Beating the 500 is damn hard. An 500index fund is basically a collection of large monopolies that extract cash.
Yes, but then why invest in an actively managed fund at all, as an LP? whole premise is that fund managers can beat an index such as the S&P500 or total market etc.
Why anyone invests in any VC fund, when you can do better in the stock market with an index fund, at much less risk, is beyond me...
Note that this data is from preqin and doesn't include all funds, just those that self report or have LPs who publish returns of funds they invested in
Earlier quoted context omitted.
Yes, but then why invest in an actively managed fund at all, as an LP? whole premise is that fund managers can beat an index such as the S&P500 or total market etc.
LPs don’t invest in funds to beat the market. By the time they are investing in VC they have already have millions in traditional investments like index funds, real estate, etc. VC investments are a high-risk, high-reward play.
For large institutional LP's like pension funds, endowments, charities, etc, they need steady smooth returns that they can draw upon year after year to fund their beneficiaries. In particular a down year really hurts them since they will have to draw down on their principal. This is a very different risk calculus to an individual saving for retirement who can stomach 30-40 years of stock market volatility with a good probability of having enough money at the end of their career.
So rather than chucking the bulk of their fund in to the asset with the highest expected returns as an individual might, these institutional investors buy a big basket of very different return streams (i.e. as uncorrelated as possible) to smooth out the bumps in each one.
Why anyone invests in any VC fund, when you can do better in the stock market with an index fund, at much less risk, is beyond me...