My wise friend wrote:
Trump Executive Order opens 401(k)s to alternative assets. The argument being made is these long duration assets are illiquid and should be kept in accounts which do not trade.Yet, without liquid markets and up to date marks (valuations), how does the individual investor know whether his actual portfolio results are coinciding with his long term objectives of retirement?What happens when the individual realizes at the end of his life cycle the assets he could not see were not marked correctly? That individual had no opportunity to revise his retirement plans accordingly. The outcome is that person is left deficient in assets and income. OOOPS!This is another Red Herring argument from the private equity industry to create FEE-FDOMS for themselves at the expense of the investor without ever coming to terms or held to account for their own failures in bad investments and excessive leverage. How convenient for all the retail stooges left holding their bags of ****?
Small 401(k) holder, do you trust the PEU secondary fee information shared with you by your investment advisor? CalPERS CEO Marcie Frost stated that her public pension fund does not share LP agreements or side letters with fund retirees.
I asked my wise friend, what chance does a 401(k) owner have of getting fee information regarding the secondary buy? His reply:
Great question. None. They would prefer you to sue them before they release that information. Blackstone co-founder Stephen Schwartzman's money went very far this election season along with the other partners in crime. They had Trump on TV today with a picture in the background but you could not see the head. My wife asked me who do you think that's the picture of? I told her I think it's Meyer Lansky (an infamous Mobster).
CalPERS was an early investor in The Carlyle Group, so surely there is institutional knowledge of how PEU fees work.
The game is which PEU expenses can be rolled onto the affiliate, which need to be passed on to LPs and what remains gets picked up by the sponsor (the PEU itself). Rest assured as little as possible ends up on the sponsor's tab.
Marks (valuations) questionable, fees opaque... exactly what no one wants in their 401(k). Yet, that's what the Trump administration is pushing. Flipping bizarre.
Politicians Red & Blue love PEU and their new TechGod/CryptoBro brethren. Increasingly, more are one.
