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Private capital has raised more money than it has returned

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Re: Private capital has raised more money than it has returned

#11

Post by skulk »

qeternity wrote: post #9
asmnzxklopqw wrote: post #6

My opinion is that private equity is the biggest scam of them all. It’s essentially just money poured in unregulated markets, fueling unaudited businesses very often highly in debt and running on very shaky grounds, in such way that they could have never been listed publicly. The whole private equity sector is kept alive only by more money poured into system and more debt, in the end looking very similar to a pyramid…

I see people say this and just have to ask what you think you know that the investors in PE funds don’t? Asset management is an insanely competitive industry. There are loads of alternatives products available. Why would people continue to invest in a scam? Do you think there is a chance you don’t understand the industry as well as the asset allocators who study it full time?

I'm guessing GP meant scam as in "a terribly short-sighted way to structure an economy" rather than your garden variety bait-and-switch scam.

Re: Private capital has raised more money than it has returned

#12

Post by patrickhogan1 »

This is silly. It’s complaining that investments made in the last 3 years haven’t returned. None of these investors in recent AI companies including investments in high return investments like Canva or Anthropic expect to have a distribution right now. They invested with a 7+ year horizon.

Re: Private capital has raised more money than it has returned

#13

Post by kjs3 »

qeternity wrote: post #10
kjs3 wrote: post #7

Earlier quoted context omitted.

Serious question: why would I do that? I mean, sure, at some point. But there's no regulation/oversight telling me I have to give you any back. In fact, my T&Cs probably say specifically I don't. If I give you 1%, that's 1% less that I have to play with. And it seems that in this market, if you don't like it, there's a line of folks behind you willing to write a check. Private capital is where you park your phuck-you…

> In fact, my T&Cs probably say specifically I don't. What basis of experience do you have to say “probably”? Where do people get this overconfidence. This is absolutely not true and is well defined in most subscriptions, especially post 2008.

What basis

The ones I've read.

Where do people get this overconfidence.

Probably the same place you got it.

Re: Private capital has raised more money than it has returned

#14

Post by tomatocracy »

smarm52 wrote: post #4

They don't define their terms. > Hedge Fund > A hedge fund is a limited partnership of private investors whose money is pooled and managed by professional fund managers. [1] > Private capital / equity > Private equity describes investment partnerships that buy and manage companies before selling them. > Private equity is often grouped with venture capital and hedge funds as an alternative investment. Then, interestin…

It's not that potential investors (in funds) have been burned so much as that the lack of distributions means they either don't have the liquidity to spare or they are up against limits as to what percentage of investments they want to hold in alternatives/illiquid investments.

Re: Private capital has raised more money than it has returned

#15

Post by JumpCrisscross »

asmnzxklopqw wrote: post #6

My opinion is that private equity is the biggest scam of them all. It’s essentially just money poured in unregulated markets, fueling unaudited businesses very often highly in debt and running on very shaky grounds, in such way that they could have never been listed publicly. The whole private equity sector is kept alive only by more money poured into system and more debt, in the end looking very similar to a pyramid…

> whole private equity sector is kept alive only by more money poured into system and more debt

Source?

Re: Private capital has raised more money than it has returned

#16

Post by pedalpete »

ProjectArcturis wrote: post #8

>And this isn’t just about the recent glut of capital raised, lagged returns and private equity exit blockages either. Lagged returns is exactly the explanation here. They publish the table of investments and returns by year. Obviously you don't get your money back the same year you invest it. It's more often a ~7 year investment. But let's round down to 5 years. Look at the chart and compare the investment in PE to…

Additionally, the size of PE cannot only be measured in the inflows and outflows. It has to take into consideration the value of the businesses being held, which it seems this article completely ignores.

Re: Private capital has raised more money than it has returned

#17

Post by qeternity »

kjs3 wrote: post #13
qeternity wrote: post #10

Earlier quoted context omitted.

> In fact, my T&Cs probably say specifically I don't. What basis of experience do you have to say “probably”? Where do people get this overconfidence. This is absolutely not true and is well defined in most subscriptions, especially post 2008.

What basis The ones I've read. Where do people get this overconfidence. Probably the same place you got it.

If you had read them, you wouldn’t call them “T&Cs” because there are specific names for these documents like PPM which are standard nomenclature.

But ok.

Re: Private capital has raised more money than it has returned

#18

Post by barfbagginus »

qeternity wrote: post #9
asmnzxklopqw wrote: post #6

My opinion is that private equity is the biggest scam of them all. It’s essentially just money poured in unregulated markets, fueling unaudited businesses very often highly in debt and running on very shaky grounds, in such way that they could have never been listed publicly. The whole private equity sector is kept alive only by more money poured into system and more debt, in the end looking very similar to a pyramid…

I see people say this and just have to ask what you think you know that the investors in PE funds don’t? Asset management is an insanely competitive industry. There are loads of alternatives products available. Why would people continue to invest in a scam? Do you think there is a chance you don’t understand the industry as well as the asset allocators who study it full time?

Easy. The entire market is full of scammers. They compete on how to scam you the best. And the companies that don't scam don't survive. Tada! There's nothing else to invest in but scams.

It's kind of how even though Google is dying due to returning awful results, no other search engine eclipses it, because the results they return are just as awful.... Yes, even kagi. Because pretty much the entire internet has become awfulized.

Let me make an analogy with the pro asset managers. I surf the internet full time. But that doesn't give me freedom from an enshittified web. That just ensures that I can still make my living off of it, as a software developer who needs the web for references and problem solving.

Managers realize it's a shell game, because they're the dealers and they're playing it for revenue against the marks. They just have to be a little more careful than the final victims.

Re: Private capital has raised more money than it has returned

#19

Post by kjs3 »

qeternity wrote: post #17
kjs3 wrote: post #13

Earlier quoted context omitted.

What basis The ones I've read. Where do people get this overconfidence. Probably the same place you got it.

If you had read them, you wouldn’t call them “T&Cs” because there are specific names for these documents like PPM which are standard nomenclature. But ok.

Oh, man...that's got to be the most classic Comic Book Guy dismissal I've seen in a while. "You said Khan was stranded on Ceti Alpha 4, when OBVIOUSLY they were stranded on Ceti Alpha 5. Everything you say is invalid!".

Bet you're a real joy at parties.

Re: Private capital has raised more money than it has returned

#20

Post by Red_Leaves_Flyy »

JumpCrisscross wrote: post #15
asmnzxklopqw wrote: post #6

My opinion is that private equity is the biggest scam of them all. It’s essentially just money poured in unregulated markets, fueling unaudited businesses very often highly in debt and running on very shaky grounds, in such way that they could have never been listed publicly. The whole private equity sector is kept alive only by more money poured into system and more debt, in the end looking very similar to a pyramid…

> whole private equity sector is kept alive only by more money poured into system and more debt Source?

This is silly question. Very few people believed that Enron was insolvent or that MBS presented systemic risk even if the rating agencies weren’t completely corrupted.
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