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Archives for February 2020

Vanguard is Moving into Private Equity

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Vanguard announced it is launching a private-equity fund. Initially, the fund will only be offered to endowments and foundations, but Vanguard plans to open its private equity fund up to wealthy individuals in the future. Is Vanguard’s move a sign of froth in the private equity space, or trouble with the hurdles required to come public? Probably both, but the number of IPOs in the U.S. has plummeted since the dotcom bust and it still hasn’t recovered. The cost and hassle of being a publicly-traded company has made staying private or going private more attractive. Dawn Lim reports at The … [Read more...]

Sunbelt States Finding Solutions for a Swarm of Tax Refugees

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The biggest problems in low tax southern states are ones high tax states wish they had, too much growth. Low tax states have become so desirable for movers and retirees that they are now looking for places to put all the people seeking an escape from the city where they can live small, cheap and safe in America. In The Wall Street Journal, Valerie Bauerlein profiles one town dealing with a mass influx of newcomers who are looking for a better America. She writes of Lake Wylie, South Carolina: Since 2000, Lake Wylie has tripled in population to 12,000 on the strength of its good schools, … [Read more...]

UK Plans Forced “Market Transformation” Banning Sale of Polluting Cars

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The UK government has unveiled a new plan to ban the sale of cars using petrol or diesel by 2035. Peter Campbell of the Financial Times reports: The UK government’s new target to ban the sale of petrol, diesel and hybrid cars by 2035 has been slammed as unworkable by the auto industry, which warned it would lead consumers to hold on to polluting cars for longer. Ministers had previously set a target to phase out “traditional” petrol and diesel sales by 2040, which excluded some hybrid cars that use both engines and batteries. But the move to bring forward the ban by five years — part of … [Read more...]

You Invest, They Win: Ray Dalio Lives his “Best Life” on Your Fees

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The founder of the largest hedge fund in the universe, Ray Dalio, tweeted this from Burning Man: Just back from Burning Man. Reminds me of Woodstock with better art (installations) and less good music. What a great vibe and what amazing creativity! Photo is with my pal and coworker Jeff Taylor at his great music camp Root Society. If you go next year, 1-5am is best. Are these the guys you want running your money? You invest, they win. But hey, it’s not about the money. It’s about saving the planet man. Because if it’s about the money (Dalio has a personal net worth of $19 billion) then … [Read more...]

Private Equity Investors Pay More for the Same Return and Lower Liquidity. Why?

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At The FT, Jonathan Ford reports that after 2006, private equity returns have been about the same as those from tradeable stocks. Yet, despite higher fees and lower liquidity, investors are still clamoring for private equity investments. He writes: Academics have long questioned whether the internal rate of return (IRR) calculations favoured by buyout firms overstate their performance against quoted stocks. Consequently, most recent studies favour the so-called “Public Market Equivalent” measure, which takes all the cash flows between the investors and a buyout fund, net of fees, and … [Read more...]