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Vanguard to make private equity available to qualified individual investors
That’s some qualification… “ 1 Qualified Purchaser: Includes, among others, natural persons owning not less than $5 million in investments; family offices owning not less than $5 million in investments; trusts not formed to acquire securities offered and each trustee and settlor is a qualified purchaser; and other entities not formed to acquire securities offered that own not less than $25 million in investments.
The text is a bit ambiguous. In its opening paragraph Vanguard writes that it "will provide qualified individual investors with access to private equity this summer."
Qualified, but with a little 'q', perhaps being synonymous with eligible. Who knows? Because two paragraphs later it writes: "Eligibility requirements include certification as a Qualified Purchaser and Accredited Investor." Big 'Q', big 'A'.
Qualified Purchaser and Accredited Investor are terms of art. Many people here have at least heard of accredited investors. The legal definition of Qualified Purchaser was given in the post above. Perhaps all one needs to be is an investing demigod (accredited investor). Again, who knows?
Agreed. David Swenson's passing points to the initial success he had with Yale's endowment in Private Equity because he was the first one to the game and had good choices, and the where withal to evaluate them. Many endowments who jumped in latter have not done anywhere nearly as well
If folks with Billions can't get an advantage, how can we?
Agreed. David Swenson's passing points to the initial success he had with Yale's endowment in Private Equity because he was the first one to the game and had good choices, and the where withal to evaluate them. Many endowments who jumped in latter have not done anywhere nearly as well
If folks with Billions can't get an advantage, how can we?
David Swenson invested in private equity, hedge funds, and timberland before many other investment professionals realized their potential. The Yale Endowment had excellent access to these alternative asset investments and its staff was proficient in evaluating management team skill. As you mentioned, many endowments who later imitated the "Yale Model" have not performed nearly as well.
There will be opportunities available in private equity. Many companies are choosing to remain private for longer time periods. Ordinary investors can invest in publicly listed private equity firms (Blackstone, The Carlyle Group, KKR, etc.). These investors can also seek out mutual funds with private equity allocations but this will not be a pure-play. SEC rules for illiquid assets (15% limit?) restrict mutual funds from owning too much private equity.
Comments
Qualified, but with a little 'q', perhaps being synonymous with eligible. Who knows? Because two paragraphs later it writes: "Eligibility requirements include certification as a Qualified Purchaser and Accredited Investor." Big 'Q', big 'A'.
Qualified Purchaser and Accredited Investor are terms of art. Many people here have at least heard of accredited investors. The legal definition of Qualified Purchaser was given in the post above. Perhaps all one needs to be is an investing demigod (accredited investor). Again, who knows?
Qualified Purchaser: Is It Different From An Accredited Investor?
https://parallelmarkets.com/blog/qualified-purchaser/
Regardless, thanks but no thanks. I'm fully capable of losing money in conventional funds. I don't need private equity to do that.
If folks with Billions can't get an advantage, how can we?
There will be opportunities available in private equity. Many companies are choosing to remain private for longer time periods. Ordinary investors can invest in publicly listed private equity firms (Blackstone, The Carlyle Group, KKR, etc.). These investors can also seek out mutual funds with private equity allocations but this will not be a pure-play. SEC rules for illiquid assets (15% limit?) restrict mutual funds from owning too much private equity.