Ross Butler speaks with Edward Talmor-Gera, Founder and CEO of NewVest, and Matthew Chapman, Director at NewVest. NewVest is a pioneering company providing low-cost, diversified index funds for private equity, private debt, and other private market strategies — revolutionizing how investors access private markets.
Edward and Matthew delve into how NewVest is challenging the conventions of private equity by creating passive exposure to the asset class, similar to index funds in public markets. The conversation looks at the rationale for a passives component to private markets programmes, and highlights NewVest’s novel approach, which offers institutional and private investors access to the world’s largest private equity funds with reduced fees and simplified processes.
Insights: Why Passive Investing in Private Markets is Revolutionary
Edward explains how indexing challenges traditional notions about private equity by providing diversified exposure to the market’s average return, which has consistently outperformed the median. He reveals that 70% of private equity funds in any vintage year underperform the pooled average, making an index approach both efficient and attractive.
Debunking Myths About Private Equity Performance
Edward and Matthew address a common myth: that trying to select top-performing funds is the only way to succeed in private equity. They share data proving that relative performance persistence among fund managers is statistically limited, making an index strategy a reliable alternative.
NewVest’s Unique Approach
Fund Structure: NewVest employs a no-management-fee structure, charging only a low carry.
Access to Top Funds: NewVest invests in the 50 largest private equity and private debt funds each year, gaining near-complete access to the top players in the industry, including Blackstone, KKR, and Carlyle.
Diversification and Cost Efficiency: By weighting investments according to target fund sizes, NewVest offers exposure to the asset class while drastically reducing fees and risk compared to active fund selection.
The Evolution of Private Markets Investing
Matthew emphasizes how passive instruments complement active strategies, allowing investors to focus on areas where they can achieve true alpha while leveraging the stability of an index for broader diversification.
Future Plans and the Vision for Private Markets
NewVest envisions a future where passive investing in private markets is as ubiquitous as it is in public markets. They aim to introduce sector-specific and niche indices, such as clean tech or geographic-focused products, and even indices for first-time funds.
Aligning Interests and Democratizing Access
Edward shares how NewVest’s alignment with LPs and innovative approach is attracting institutions, family offices, and even individual investors.
#PrivateEquity #PassiveInvesting #PrivateMarkets #NewVest #PrivateEquityPodcast #AlternativeInvestments #Diversification #FundShackPodcast
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Fund Shack is a private equity podcast and global media channel for alternative investment professionals. Fund Shack is produced by Linear B Group and if you are interested in appearing on the show, wish to propose a client, or are interested in sponsorship, contact:
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