📈 Mailbag: Your questions answered (Part 2)

Letters to the Editor of Private Capital Insider

Author

Jake @ Equifund
February 21, 2024

Today, we’re publishing Part 2 of our mailbag series.

Going forward, we’ll start publishing mailbag / “letters to the editor” at the end of each issue so we can keep up to date on all the questions and comments we receive each week.

Let’s dive in, 

-Jake Hoffberg

P.S Looking for back issues of Private Capital Insider?

This issue was our first deeper dive into the top 10 largest private equity firms.

Not only was it one of our longest issues to date, it also happened to coincide with a major update from our email providers.

I can’t tell if we were having deliverability issues, and were just getting stuck in spam…

Or if the issue was so long and boring, no one finished and rated it. 

If you have any comments or questions about this one, be sure to send them in :)

This Weekend Edition was a followup to our May 6, 2023 issue, “Bank Failures, Short Sellers, and Commercial Real Estate”

Comment 1

Please stay on course with your research. We can't believe a single Government Agency. I can't tell if it's an untruth or stupidity. Coming from the White House, we know it is both! 

The Fed is not owned by our Government and should be Audited so we really know what they are doing.

Comment 2

I liked the information regarding China and about [BRICS bloc] but I still have questions about buying gold as an investment. 

Just wondering what the general consensus is, cause during COVID it was paper towels and toilet paper that were in high demand, not gold. 

So for investors buying gold as a hedge to a devalued dollar how does that work cause you can’t wipe your butt with a gold brick.

As a general comment on gold, the entire point of owning physical precious metal is a store of value and a hedge against inflation.

Not to mention, you can convert gold into any currency in the world, basically at any time you want. So, if you think there is going to be some “new” currency that will displace the Dollar, gold would be the thing you’d probably be able to convert into the new system. 

Of course, the government could pull an FDR and confiscate it (or otherwise give you a terrible fixed price for conversion)...

But at some point, you just gotta pick a portfolio allocation and stick with it. If you’re a “I want 5-10% of my portfolio in precious metals because that makes sense to me” sort, then go grab some bullion or coins 

(Note: you may want to consider avoiding the numismatic and collectibles, as the premium above the spot metal price might not be what you’re looking for in this type of allocation. What you could want is convertibility).

Comment 3

Explained confusing info so I finally had a better understanding of how $$/banking/manipulation of $$ works & why things are in trouble now + what may be happening soon.

Comment 4

Reading this is a bit like trying to swim through molasses:)

If you think reading my writing is like swimming through molasses, pity the poor analyst (me) who has to read the primary source documents to attempt to figure this all out. 🙂

This was our second foray into the private equity deep dives – this was also one of our longest issues with one of our lowest poll engagement rates (so either we had deliverability issues or it was just too long).

Comment 1

Great content. These guys at Blackstone (and their peers) are going to dry markets up! It seems they are going to own everything! 

You mentioned that "Even a modest increase to a 10% allocation could represent $5.3 Trillion of asset shifting to alternatives." 

What will they buy? The small-cap Russel 2000 is like a $3.5 trillion market cap. Jesus, they are going to ride the markets! With the rise of both, passive investing and private markets (plus concentration in public markets) it seems public markets will become boring for the most part. 

All the action seems to be in private markets. As feedback to the article, I think the last part about Private Credit probably deserves an article on its own. A lot to say probably around it. 

Private Credit is like the girl that nobody wanted to date at the prom. It was always there but everybody ignored it. Then, later in the 10-year reunion, she became the hottest girl in the room! 

I haven't researched this, but I can see their "Private Credit" funds financing a bunch of small companies, and then, their "Growth" funds purchasing the assets at a bargain price when companies default on loans. 

(For these you mentioned about debt seniority and the ICR). 

They pay for the thing and give themselves the change. Just speculating here. Trying to understand the money flow.

Comment 2

Excellent analysis...Brookfield has been doing the alt approach with energy and infrastructure for years, but is not in retail...interesting how alts will hit main street, love the comparison to mutual fund boom. Great insight and nice tying together of all the threads.

This Weekend Edition focused on some of the happenings in the oil and gas industry here in America – a topic we’ll likely be spending more time on as it’s such a significant aspect of the global economy.

One of the things we’ve been testing out is our send schedule (both time and date). This issue went out on Sunday instead of our usual Saturday, I’m not sure if that’s impacted our engagement metrics. 

Either way, it seems like we’re doing a good job covering the financial news stories that don’t get a lot of attention from the mainstream financial media.

Comment 1

Very new to all of this but, these are the things no one else will tell you. Thanks for the information. 

Comment 2

It's a lot to take in. More rules ,maybe to keep the ones at the top from stealing more than they deserve. Thanks.

Comment 3

Biden needs to treat legal business, such as oil/gas with some respect...Oil/gas has been crucial to USA in development of society and lifting living standards...LNG exports should be encouraged and fast tracked.

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