10+ hours of podcasts, in 5 minutes.
6 quotes from 1 episode on Fund Shack, each with a timestamped link to the source.
John Renkema argues that picking top-performing large buyout funds is statistically impossible. To generate returns, allocators commit steady capital across vintage years during periods of scarce liquidity.
Constructing a mature institutional private equity portfolio requires years of steady capital deployment across market cycles.
“The buildup of a portfolio will take you at least five to seven years…”
Maintaining capital commitments during periods of scarce liquidity captures the vintage years that historically generate the highest returns.
“Make sure that you pace your commitments through each of the vintage years in a way that does not dry up at the moment that liquidity becomes scarce. Because if liquidity becomes scarce, generally those will be the vintage years that will do best.”
No data supports the idea that investors can successfully choose which large fund will outperform over a 10 to 20 year horizon.
“Let me be clear there's no literature on the fact that you can actually select one fund over another because you say, well, that's going to perform better in the next 10 to 20 years…”
Manager selection remains effective in specific segments. Investors secure an edge by picking venture capital, distressed debt, emerging managers, or small buyout funds.
“This might be different for the very small funds, the venture funds, and the small buyout space or the distress space or emerging managers…”
General partners claim continuation vehicles are competitively priced. This process never results in multiple offers for limited partners, exposing current investors to unfavorable terms.
“Although a GP will always say that they've run a competitive process to come up with a price for a continuation vehicle, it has never led to the LP having choice between two offers in the market…”
“…set those terms in such a way that might be unenviable for the existing LPs.”
How we attribute quotes. Every quote was matched against the episode transcript, so the words and the timestamp are real (we trim filler words like "um", nothing else). The name comes from our written summary of the episode. YouTube gives us no voice-by-voice transcript, so open the timestamp to hear who is talking. See a wrong name? Tell us and we fix or remove it.
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