This week, Warren Buffett answered questions with respect to PE during the annual Berkshire Hathaway AGM. Thanks to the "Hobbyist Investor" we can provide a full transcript of his remarks on alternative investments.
His main points?
And to finish things off, Munger says - "Warren, all they're doing is lying a little bit to make the money come in".
To which Buffett replies "Yeah. Yeah, well that sums it up."
Castle Hall agrees that private markets can add considerable value to pension portfolios, particularly when pension plans deal with underfunded portfolios given the present value of anticipated pension payment obligations. But - high fees and other investment manager favorable terms can significantly degrade investor returns from private asset classes.
From a due diligence perspective, PE needs:
That's 12 points which come to mind pretty quickly - and there are likely 100 more.
Plenty to consider in each ODD review, as always!
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