- 3 hours ago
Private equity has become an enormous and influential force in the global economy, a transformation discussed in this week's Beyond The Billions. Forbes Deputy Editor Giacomo Tognini and Staff Writer Hank Tucker trace the industry's history, starting with the mid-1970s founding of KKR by Henry Kravis, George Roberts, and Jerry Colberg, and leading up to the rise of current giants such as Steve Schwarzman's Blackstone.
This exclusive world is now facing a massive shift that could open it up to everyday retirement savers. To understand this high-stakes game, learn how firms like Blackstone and Apollo are establishing partnerships with asset managers such as Vanguard. Additionally, new regulations regarding 401k investments may soon have a direct impact on your future savings.
00:00 This Week’s Billionaires Recap
03:32 What Exactly IS Private Equity?
05:38 How the Private Equity Empire Was Built
08:36 The Founders Who Got Filthy Rich Off PE
12:17 The Race For The $29 Trillion Retirement Pot
24:55 Vanguard And Blackstone Team Up: Investing Titans Merge
28:41 Weighing The Risks vs. The Diversification Benefit
To read more about private equity’s move to access $29 trillion in retirement savings: https://www.forbes.com/sites/hanktucker/2025/07/24/private-equitys-29-trillion-retirement-savings-opportunity-under-trump/
To read more about Trump’s executive order paving the way for 401(k) providers to offer access to private equity investments:
https://www.forbes.com/sites/hanktucker/2025/08/08/private-equity-firms-celebrate-trumps-executive-order-giving-them-the-keys-to-retirement/
To read more about Mercor’s self-made billionaires: https://www.forbes.com/sites/richardnieva/2025/10/30/mercor-youngest-self-made-billionaires/
To read more about Steve Huffman and Reddit: https://www.forbes.com/sites/monicahunter-hart/2025/11/02/reddits-ceo-debuts-as-a-steve-huffman-billionaire-20-years-after-cofounding-the-company/
To read more about Meta’s share drop and Mark Zuckerberg’s decline in wealth: https://www.forbes.com/sites/tylerroush/2025/10/30/mark-zuckerberg-loses-25-billion-now-worlds-fifth-richest-as-meta-shares-plummet/
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This exclusive world is now facing a massive shift that could open it up to everyday retirement savers. To understand this high-stakes game, learn how firms like Blackstone and Apollo are establishing partnerships with asset managers such as Vanguard. Additionally, new regulations regarding 401k investments may soon have a direct impact on your future savings.
00:00 This Week’s Billionaires Recap
03:32 What Exactly IS Private Equity?
05:38 How the Private Equity Empire Was Built
08:36 The Founders Who Got Filthy Rich Off PE
12:17 The Race For The $29 Trillion Retirement Pot
24:55 Vanguard And Blackstone Team Up: Investing Titans Merge
28:41 Weighing The Risks vs. The Diversification Benefit
To read more about private equity’s move to access $29 trillion in retirement savings: https://www.forbes.com/sites/hanktucker/2025/07/24/private-equitys-29-trillion-retirement-savings-opportunity-under-trump/
To read more about Trump’s executive order paving the way for 401(k) providers to offer access to private equity investments:
https://www.forbes.com/sites/hanktucker/2025/08/08/private-equity-firms-celebrate-trumps-executive-order-giving-them-the-keys-to-retirement/
To read more about Mercor’s self-made billionaires: https://www.forbes.com/sites/richardnieva/2025/10/30/mercor-youngest-self-made-billionaires/
To read more about Steve Huffman and Reddit: https://www.forbes.com/sites/monicahunter-hart/2025/11/02/reddits-ceo-debuts-as-a-steve-huffman-billionaire-20-years-after-cofounding-the-company/
To read more about Meta’s share drop and Mark Zuckerberg’s decline in wealth: https://www.forbes.com/sites/tylerroush/2025/10/30/mark-zuckerberg-loses-25-billion-now-worlds-fifth-richest-as-meta-shares-plummet/
Subscribe to FORBES: https://www.youtube.com/user/Forbes?sub_confirmation=1
Fuel your success with Forbes. Gain unlimited access to premium journalism, including breaking news, groundbreaking in-depth reported stories, daily digests and more. Plus, members get a front-row seat at members-only events with leading thinkers and doers, access to premium video that can help you get ahead, an ad-light experience, early access to select products including NFT drops and more:
https://account.forbes.com/membership/?utm_source=youtube&utm_medium=display&utm_campaign=growth_non-sub_paid_subscribe_ytdescript
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00:00This week in Billionaires, three 22-year-olds, Brendan Foody, Adarsh Hiramath, and Surya Mitha,
00:07have just become the world's youngest self-made billionaires thanks to the AI boom.
00:11Their San Francisco-based recruiting startup, Mercore, received a $350 million funding round,
00:18catapulting the company's valuation to a massive $10 billion.
00:22Mercore connects expert-level contractors, such as PhDs and lawyers,
00:26with cutting-edge AI labs like OpenAI to label data to help train their models.
00:32Mercore's founders are now the youngest ever self-made billionaires,
00:35moving ahead of tech icon Mark Zuckerberg, who was 23 when he first became a billionaire.
00:41Reddit co-founder and CEO Steve Huffman finally joined the billionaire ranks
00:46with an estimated $1.2 billion fortune after the company reported five consecutive profitable quarters
00:52driven by strong ad sales.
00:54Huffman is a notable latecomer to the social media billionaire club,
00:58having initially sold the entire company in 2006 for only $10 million.
01:03His recent success is tied to leveraging Reddit's massive store of authentic human conversations
01:09into lucrative licensing deals with giants like Google and OpenAI,
01:14now the company's second-largest revenue source.
01:17Mark Zuckerberg's net worth fell by $42 billion over the past week,
01:22as MetaShares plummeted after it reported third-quarter earnings below economists' projections.
01:28The firm's lower earnings were marked by a one-time tax charge of $15.9 billion
01:34due to President Donald Trump's One Big Beautiful Bill Act.
01:38MetaShares dropped by 17% between October 30 and November 4,
01:42pushing Zuckerberg down from the third richest person in the world
01:46to number five on Forbes' real-time billionaires list.
01:50Welcome to Beyond the Billions.
01:51I'm Giacomo Tugnini at Forbes,
01:53and joining me today is Hank Tucker, a staff writer.
01:56Hank, so great to have you here.
01:58And I remember when six years ago, we both joined as interns,
02:02and I was convinced that you actually were on staff because you're so tall.
02:06I don't know if viewers can see.
02:09And you've talked to so many fascinating people over the years,
02:12like Todd Bowley, Josh Harris.
02:16How did you come to cover private equity and get to the beat you're doing now?
02:20Yeah, I mean, great to be here with you.
02:22Six years flies by.
02:23It's crazy.
02:24Yeah, I'm covering a lot of private equity, asset managers, hedge funds,
02:28all sorts of investing trends.
02:31But, yeah, so the private equity firms I cover now, it was kind of by accident.
02:36I didn't know much about it when I was in college, coming out of college,
02:39getting to Forbes, and just all the internships I applied to.
02:44I ended up on our money and investing team here
02:46and started doing that for a couple of years,
02:51did my tour of duty on the wealth team with you,
02:54doing a lot of the billionaire valuations
02:55for the dozens of private equity billionaires, hedge fund billionaires.
02:59And it's really, I think, a fascinating, growing, huge part of the economy now
03:06that there's so much to learn about, so much I've learned about,
03:11and so much more that I still don't know.
03:14But it's a really influential –
03:17I mean, I think there's like over 10 million workers
03:20employed by private equity-owned businesses,
03:23and so it's something that matters to a lot of people.
03:25So I think it's been a really interesting thing to cover.
03:29Yeah, and I guess briefly, what exactly is private equity, and how does it work?
03:34And then maybe we can go into the details.
03:36Yeah, so a private equity firm is an investment firm
03:39that raises a pool of money from mostly institutional investors
03:43that we'll talk about, and it uses that cash to buy private businesses,
03:50whether it's from a family-owned business that wants to sell,
03:54the family's retiring, or from another private equity firm,
03:57or carving out from a larger corporation.
04:00So it has a portfolio of businesses that then it owns for a few years,
04:06makes changes in to make more efficient boost revenue profits.
04:12And then after a few years, usually five-ish, so that's been getting longer,
04:16as things get harder to sell the last couple of years.
04:22Then it'll sell those businesses.
04:24It'll keep some of the profits as fees and distribute some of the profits
04:31back to its original investors, and ideally make a good rate of return
04:36that's as good or better than what you can get in the public stock market,
04:41which, as we know, you invest in Apple stock, Google stock.
04:44And 50 years ago, that was kind of the only way for a company to grow
04:48was to go public.
04:49Now you can get bought by private equity, get backed by venture capital,
04:54so there's a lot of different avenues now.
04:56But that's kind of the basics.
04:57Right, because they go out, they raise a fund from investors,
05:00and then depending on the life cycle of the fund, right,
05:02you said it used to be five years, now it's a bit longer,
05:05then they sort of move on.
05:07Yeah, they sell the companies from that fund, they raise a new fund,
05:10it repeats over and over again, and the firms that have been around
05:1520 or 30 years, they're raising their 7 or 8 or 12 flagship funds.
05:21A lot of times it overlaps, too, whether they own these companies
05:24and fund 10, and then they're investing out of fund 11,
05:27and get sort of the same investors in all their funds.
05:31But, so yeah, that's kind of broadly how they make their money.
05:38And you were saying before how important a part of the economy it is now, right,
05:41with, I think, 10 million workers employed in private equity.
05:46From what I understand, it kind of started out in earnest in the 70s, right,
05:50with KKR, which is one of the giants.
05:53I guess if you can walk us through a little bit the history of those kind of origins
05:57to now where it's such an enormous part of the economy.
05:59Yeah, so KKR, you know, one of the biggest firms still to this day
06:05and one of the earliest private equity firms to be founded.
06:10They were founded in the mid-1970s by Henry Kravitz, George Roberts, Jerry Kohlberg.
06:18Their initials made the name of the firm.
06:20And, you know, they started raising money from some different states' pension funds.
06:25I think Oregon was one of the early ones.
06:28A few other states that they pitched to, hey, say, you know, invest in our fund.
06:33You know, we're going to kind of have this new way to generate returns.
06:38You know, you won't be as liquid, meaning you won't be able to sell it, you know, every day.
06:42But, you know, we're going to target returning this much money to you, you know,
06:46within 10 years or, you know, however long the investment term is.
06:51And so they started growing that way.
06:54Blackstone, Steve Schwartzman, the founder of Blackstone, started that in the mid-1980s, early 1980s, I think.
07:03And, you know, that's over a trillion-dollar firm now.
07:06And, you know, all these big major firms, KKR, Blackstone, Apollo, Carlisle,
07:12they've expanded beyond, well, traditional private equity into, you know, credit, infrastructure, real estate.
07:18There's a bunch of different areas of that that kind of all get lumped into private equity now,
07:23which, I mean, I think there's, depending on how you count, it's over $10 trillion in total assets in kind of the private equity industry.
07:33But, so, yeah, there were a lot of, you know, in the early days, a lot of pension funds, you know,
07:40state pension funds, insurance businesses, investing their assets into these firms to help them grow.
07:47College endowments, I think Yale was one of the early ones in the 80s to really start allocating a lot of its assets to private equity firms.
07:57And, you know, the last four or five decades, it's done really well.
08:01The returns have been, at least for the top firms, you know, better than what, you know, you or me could get in the public stock market.
08:09And, you know, stocks have been great, too.
08:11So they've made a lot of money for investors.
08:13But, you know, private equity has had, you know, a real, you know, almost half century of, you know, growth for good reason.
08:21It's been, you know, a bull market.
08:22The last few years have been a little slower, and we'll get into that.
08:24But it's really, you know, taken off on, like, probably even more so than most other parts of the economy.
08:34And it's also been hugely successful for the founders, right?
08:38I mean, how many, you know, I'm not going to hold you to it because it's hard to remember, but dozens of private equity billionaires, right?
08:44Not just in the U.S., but globally.
08:45Yeah, several dozen, maybe close to 100, you know, Steve Schwartzman, you know, I didn't check the real-time billionaires list, but right before getting on it, he's around 50 billion.
08:54He's one of the richest people in the world, right?
08:55Yeah, yeah.
08:56And, you know, even, especially the last decade or so, there have been kind of separate private equity firms that are, their main purpose is to buy stakes in other private equity firms.
09:06And they value those firms, you know, several billion-dollar valuations to make their founders billionaires.
09:13And, yeah, you know, Blackstone, KKR, Apollo, several others are all publicly traded, and their founders are all, you know, billionaires.
09:22So, I mean, yeah, several dozen, you know, maybe close to 100, if not more.
09:26So, it's, you know, it's made a lot of, you know, pensioners and, you know, college endowments rich, but nobody's benefited more than the founders themselves, I think.
09:40Right.
09:41And I wanted to dig in a bit more into sort of who has access to these funds, right?
09:44You mentioned at the beginning it was, you know, state pension funds, and then it expanded to college endowments.
09:49Other, you know, obviously there's also large private investors themselves, right?
09:54And what you wrote about a couple months ago is sort of this now changing environment where private equity might get opened up to sort of more, let's call it average Americans, right?
10:08Because right now, right, if you or I wanted to invest in, say, a Blackstone fund or an Apollo fund, what would the requirements be?
10:17Yeah, it would be, well, I mean, for the first, you know, generations of, you know, private equities evolution, you know, it's not worth it for them to go to you and me and say, you know, hey, can you invest, you know, $1,000 at a time?
10:33You know, they want the, you know, the California state pension fund to invest $50 million, and then that's just one conversation that can do a lot more for them than I can invest for my own savings.
10:42So, you know, that's why they primarily just went to these big institutions, pensions, endowments, for the first few decades.
10:52Now they've, I don't want to say exhausted all those because, you know, those institutions still have money that they can invest, but a lot of it is still kind of stuck in prior private equity funds that haven't been distributed yet.
11:06So, you know, particularly Blackstone through their, what they call their private wealth business, they have, you know, I think close to $300 billion in assets just from private wealth.
11:18So that's mainly they've been going to financial advisors who then kind of go to their high net worth clients and say, hey, we can allocate this much, you know, we can kind of bundle a lot of our clients' assets and offer, you know, these billions of dollars to, you know, invest in a private equity firm's fund.
11:39There have been some fintech companies, you know, iCapital has been involved in facilitating that, iCapital network, going through financial advisors to, you know, open up access to these funds to individuals.
11:53So far, that's mainly just been pretty wealthy individuals with, you know, we were talking about people with a few million dollars of investable assets to spend that can afford to set aside a portion of that to a private equity fund that, again, they might not be able to touch for five years, 10 years while it gets invested and grown and then sold and distributed.
12:14But, you know, more and more, I think, you know, a lot of these private equity firms think the holy grail is, you know, retirement assets, which we'll get into, which, you know, you and me have 401ks and none of that is in private equity funds right now.
12:29Eventually, that might change.
12:30So, yeah, I mean, there's all these major firms are kind of in, you know, a race to, you know, try to get access to, you know, as many of these, you know, target date funds, retirement funds, individual brokerage accounts as they can, because that's kind of the next big frontier they haven't reached yet.
12:55Right, because, you know, now you and I would, I guess, like you said, need a few million dollars of, even more, probably by net worth, to allocate like a million or two to these funds, right?
13:06But you were writing in one of your stories that now there's this sort of $29 trillion pot of money, right?
13:14If you combine, I believe it was $12 billion and $12 trillion and a defined contribution, which is 401ks, similar accounts like that,
13:24and then another, I think, $17 trillion in IRAs, individual retirement accounts, which are kind of separate accounts that people can open.
13:32And those were not, I mean, even right now, right, you can't invest in, that's usually what, tracking the stock market, right?
13:39You can't invest in private equity now.
13:41But now there's, I guess, two things happening, right?
13:45One is the, you know, the advisors running those IRAs and 401ks are partnering with private equity firms,
13:51and then there's sort of government regulation changing, right?
13:54So, yeah, yeah, there's a lot of regulation changing.
13:57So, you're right.
13:58Right now, you know, you and me have a 401k through Fidelity, through Forbes.
14:03We invest, I hope you invest.
14:06I do, yeah, yeah, yeah.
14:07Every paycheck, a portion of that to save for retirement.
14:11And if you look at what that's actually invested in, you go into, you know, your actual 401k account,
14:21you get defaulted into, like, I'm defaulted into the 2060 target date retirement fund through Fidelity.
14:27And that's like 50% U.S. stocks, 40% international stocks, 10% bonds.
14:32It'll, you know, they will manage that allocation.
14:34But it's all stocks and bonds, you know, public markets.
14:37So, now, and that's because those are really cheap to invest in.
14:44You can, you know, the index funds can, the fees can be close to zero for stocks and bonds.
14:51And that's because a lot of these 401k plan administrators have a fiduciary duty to their investors through regulations.
15:01ERISA is a law from, like, 1974 that, when a lot of these accounts started kind of becoming more popular,
15:08that set a lot of standards for that.
15:11And, you know, part of this fiduciary duty is keeping costs low, fees low.
15:16And so, you know, individuals could, in theory, sue their 401k administrator if the costs are too high for excessive fees.
15:29So, this year, the Trump administration issued an executive order in August that, you know, really looked like it was going to change that
15:42and instructed the Department of Labor to really revisit the guidance that had been in effect that Biden's administration had kind of reinforced.
15:53And that executive order really seemed like it was pressuring the labor secretary to, you know,
16:01make it harder for, you know, these lawsuits to get in the way of, you know, 401k, the people that manage those plans to diversify into different asset classes like private equity
16:14and also like crypto and other assets, you know, as well.
16:17So, you know, we could start seeing a lot more of that.
16:20I don't think it's going to happen right away.
16:21And, you know, if it does, it'll start maybe the first couple of years with maybe as an option that, you know,
16:30you'd have to actively, you know, proactively go into your account and select this fund that's 10% private equity
16:36instead of the default target date that's all stocks and bonds.
16:39But, you know, a lot of the people in the industry, you know, at Vanguard, which administrates, you know,
16:46manages trillions in target date funds, you know, at Fidelity, you know, think that eventually, you know,
16:52some of these default funds might allocate, you know, a small portion.
16:56It'll never be the majority of the fund, but a portion of their assets to private equity funds.
17:04So it seems that the major legal change, I guess, has been this, there was sort of a legal risk, right?
17:09For these advisors to offer it.
17:11And now the shop administration is trying to provide assurances, basically, that that won't.
17:17Yeah, there's been a fear that if we offer, you know, because private equity funds are, you know,
17:23they're much higher fees, you know, I don't think we've talked about yet.
17:26But, you know, if you invest in a private equity firm, you're paying 2% management fees for your assets,
17:31typically, and then a performance fee of 20% of the profits on top of,
17:35once you get past, you know, what's called a hurdle, which is usually around 8% or so.
17:39So you keep that first 8% and then you pay 20% of the remaining profits.
17:43So those are pretty steep fees.
17:44That's why there have been, you know, 100 billionaires created from this industry.
17:47But, yeah, so the Trump administration, the Department of Labor is expected to make it harder to, you know,
17:59sue your 401k administrator over that, you know, even if fees get a little higher than they are now.
18:05The idea is that, you know, you'll make more than that on the returns, you know, after fees to make it worth it.
18:12I guess it's interesting how some of the first investors, right, in private equity were public pension funds, right,
18:19which functionally is similar to 401k, right?
18:21It's, you have someone who's relying on it for retirement.
18:24I guess, are you surprised that it's taking, that it's taken this long for this to occur?
18:31Yeah, I am.
18:31Because, you know, in theory, this, you know, illiquid assets that are stuck for a certain period of time for years,
18:38you know, that should line up with 401ks because, you know, we're not going to touch our 401k for 30 years, 40 years until we retire.
18:46So we don't need to trade every day in those accounts.
18:49So, you know, that's what everyone in this industry says that, you know,
18:52just the burden of the regulation has been kind of holding them back.
18:57But, you know, this can, you know, really help retirees, you know, enjoy the returns that, you know,
19:07private markets have generated for the last few decades, the outperformance over public markets,
19:14which has been thought of as like an illiquidity premium almost.
19:17But it's not all, you know, I don't think these firms are just being entirely benevolent to, like,
19:26oh, you know, we'll let these common people access the, you know, it's going to help them first and foremost
19:33because, you know, more money for them means more fees and more profits.
19:37For the advisors.
19:37For, yeah, the private equity funds.
19:40Oh, private equity firms.
19:41But, so, you know, whether it helps individuals is kind of still, you know, a little up in the air.
19:51And, you know, again, there are some reasons beyond just, you know, democratizing is, I think,
19:59the buzzword, you know, to individuals that, you know, make these private equity firms want to do this.
20:05But, yeah, so, I guess, you know, we'll see 10 years from now, 20 years from now, 50 years from now, how it works.
20:17I guess, what do you kind of see as the biggest risks and benefits for, like, your average, you know,
20:23person like you and me who has 401k?
20:26And I guess, like, if you compare it, like, how has it worked out for the people who have public pension, right?
20:30Yeah, you know, it's worked great, I think, for the people that have their public pension funds.
20:36You know, these, a lot of these funds are, you know, on average allocated about 20 to 25 percent of their portfolios to private equity.
20:43And, you know, they've performed pretty well.
20:45They have professional managers overseeing it all.
20:49And, you know, like I said, these, you know, returns for, you know, these kind of blue-chip private equity funds through the 1990s,
20:56for the 2000s, 2010s, were really good.
21:00I guess the risk would be that, you know, there's kind of a fear that that golden age is ending a little bit.
21:07You're right, you're saying the last years have not been this year.
21:08Yeah, the last three or four years.
21:11Number one, you know, I think the valuations were really high, you know, around 2020, 2021, especially coming out of COVID.
21:17There was kind of a rally in some of these tech companies, software companies that a lot of these private equity firms own
21:22that, you know, they may have overpaid for some of those four years ago, five years ago.
21:28And now they're sitting there trying to, you know, sell a lot of their assets.
21:33And they can't, you know, in part because, you know, this is kind of overgeneralizing,
21:39but, you know, private equity funds, a lot of the transactions now are just selling to another private equity fund
21:44or buying from another private equity fund.
21:46Whereas 20 years ago, there was maybe more, there was, you know, easier money to be had
21:52and buying more companies from, you know, family-owned businesses that maybe hadn't been run as efficiently
21:59that were like, oh, we'll just change a few things and double the value and sell it in five years.
22:06There's also fewer companies going public, right?
22:08I mean, I guess this year we've had a few more, but there was kind of a dearth of IPOs.
22:10Yeah, yeah. So that sort of exit path has also kind of almost closed up or at least slowed down.
22:18So, yeah, your potential exits are, you know, selling to another private equity firm,
22:24taking it public, selling it to a larger corporation, and that's all getting slower.
22:29So they haven't been able to distribute as much profits back to their, you know,
22:34the institutions that invested in them five years ago, six years ago,
22:37because their money is still sitting there waiting to be, you know, realized.
22:40You know, sold in those companies.
22:43So, you know, that's part of the reason why they have to kind of go this other path to individuals,
22:49because they haven't been able to raise as much money from their old institutional customers.
22:56And so I think there's a fear that this sort of slump might continue
23:00and the returns maybe won't be much better than you can just get from a low-cost stock index fund
23:05for the next, you know, for long-term 10 years, 20 years,
23:10and that, you know, individuals are just going to get caught with some of these overvalued private assets
23:16that, you know, pensions and endowments benefited from selling into these funds
23:22that are more geared to retail.
23:24So, you know, I guess, you know, that's the risk that you're going to pay higher fees for, you know,
23:33no better returns.
23:36The benefit, you know, is that, you know, I think diversification is always a benefit
23:40in any sort of investment portfolio that, you know, you want to have as many different
23:45kind of uncorrelated assets as possible, whether it's, you know, stocks, bonds, private equity,
23:50you know, real estate, you know, crypto, if you're, you're having a risk appetite for crypto,
23:57you can, I don't think any financial advisor would recommend a large percentage of that.
24:01But so, yeah, I mean, I think diversification is always, you know, a good thing.
24:08And if that's, if this gets into a target date, you know, retirement fund at a small allocation at first,
24:14or, you know, worst case, it's not going to change much for your overall portfolio returns.
24:20Because it'll be a small percentage that you're saying, yeah.
24:23But again, you know, it could kind of shield you from the volatility of the stock market
24:28and, you know, help limit the risk a little bit.
24:34But so, yeah, I guess the gist is, you know, we don't know yet.
24:39There are arguments on both sides.
24:41A lot of people are wondering about the risks of doing this or wondering why it's really needed.
24:46But it's not definitively, you know, a good or bad thing for, for individuals.
24:54Right.
24:54And I, you and our colleague, Sergey Klebschikov, who co-wrote one of the stories with you,
25:00you mentioned, obviously, this big strategic alliance between Vanguard and Blackstone, right?
25:04Obviously, two titans, their respective industries.
25:07I think you mentioned also Apollo.
25:08I guess, do you expect, how widespread does it seem like it's going to be in terms of having all these big names from private equity
25:17and the IRA and 401k side working together?
25:20Yeah, I think pretty much every big name from private equity is going to, you know,
25:24try to start one of these partnerships, you know, launch one of these funds that blend public and private markets
25:28just because it's kind of a can't lose for them.
25:31You know, the more assets they have, the more avenues they have to generate capital.
25:37And, you know, these kind of traditional asset managers like Vanguard, like, you know, Apollo's partner with State Street,
25:44have those customers already, have those relationships with individuals that they're just such kind of an easy pot of money,
25:52money of assets that can be accessed by these private equity firms.
25:58And so I think you're going to see a lot of those continue, a lot of those, you know, launch more funds and grow.
26:04The story we wrote, Sergey and I covered, you know, Vanguard and Blackstone partnered with Wellington,
26:10another investment manager who kind of sub-advises a lot of Vanguard stock funds and bond funds
26:19that manages a trillion dollars in assets that's going to kind of oversee this fund that has, you know,
26:26like a third assets in Vanguard, no, in Blackstone private market funds and then, you know,
26:37like a third in bond funds, a third in equity, you know, in public stocks.
26:40And so there are a lot of these funds that are cropping up that have sort of intermittent liquidity
26:47that they're being offered through financial advisors primarily that, you know, you can sell usually once a quarter.
26:56Which would be available for someone who has a Vanguard for a 1K or a 1K.
27:00Yeah. And so, you know, it'll start by just, you know, being a part of your portfolio,
27:07your savings in your brokerage account. You can select that fund probably.
27:12But again, eventually it could be something on the menu that you could select in your 401K.
27:17So this is already available, this long-term fund?
27:21I think it's still in the approval phase.
27:24They launched their prospectus for kind of explaining what the fund will be.
27:28It hasn't launched yet.
27:31There is an ETF that Apollo launched with State Street in partnership that is available.
27:36That's exclusively a private credit ETF, which, you know, is private credit, I guess,
27:42can be thought of as sort of a sub-genre of private equity in terms of lending to private companies,
27:50kind of doing what banks have traditionally done and, you know, making loans to startups,
27:57private companies, financing private equity buyouts, and getting just the, you know, interest back.
28:05So there is a couple private credit funds that you can invest in.
28:12Blackstone has some of its own funds, you know, private credit funds, BREIT, if you've heard.
28:18It's like a real estate fund that it offers to individuals that you can buy through a financial advisor
28:24and get some liquidity quarterly if you want to sell.
28:28You can't sell every day, but you can sell once a quarter.
28:32And so, yeah, there are a lot of these that have started to become available in the last few years,
28:37and I think it's just going to keep going.
28:39And I guess would you want to be invested, to have your 401K invested in private equity?
28:46That's a good question.
28:47I think, yes, I wouldn't mind having a small portion of it in private equity.
28:53You know, again, you don't want to be concentrated in anything too heavily,
28:58and I wouldn't want, you know, 100% of, you know, my cash, you know, stuck with this firm.
29:03If it has an asset, it can't sell.
29:06But I think the upside in general for private markets, just because, you know, public stocks,
29:15they're kind of, it's a pain to go public and have to deal with the quarterly earnings reports
29:21and all the regulations that come with that.
29:23And that has helped, I think, private markets produce better returns for a while,
29:28and I think some of that trend will probably continue.
29:32So, yeah, I think, you know, especially Blackstone, KKR,
29:37these firms have good track records of, you know, making money for their investors
29:41over, you know, a long, long time.
29:44So I wouldn't mind getting some of that.
29:47But I don't think it's going to make a huge transformative difference.
29:52And, you know, I think stocks have worked out just fine for people for a long time.
29:58But I guess the short answer, or the long answer I just gave would be, yeah.
30:04Well, this has been super informative,
30:06and I think I even got some of my own personal questions out in this after reading your stories.
30:11But thanks so much for joining me, Hank.
30:12Thanks for having me, Giacomo.
30:13You can read Hank's stories and the other stories we talked about in this episode in the show notes.
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