Should I Have Private Equity in My Portfolio?

Retirement Answer Man

Roger Whitney, CFP®, CIMA®, RMA, CPWA®

Lifeplanning, Retirementplanning, Financialplanning, Saving, Careerplanning, Self-improvement, Education, Retirementpodcast, Investing, Business, Investmentmanagement, Retirement

4.7 • 1.1K Ratings

🗓️ 26 February 2025

⏱️ 45 minutes

🔗️ Recording | iTunes | RSS

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Summary

In this episode, we tackle the complexities surrounding private equity in retirement portfolios. Join Roger as he navigates a listener's inquiry about the necessity and implications of investing in private equity, especially in light of recent discussions and literature on the topic. With insights from investment expert Peter Lazaroff, we explore the pros and cons, the importance of having a solid retirement plan, and whether private equity is truly a beneficial addition to your portfolio. Tune in to gain clarity and confidence in your retirement investment strategy!

OUTLINE OF THIS EPISODE OF THE RETIREMENT ANSWER MAN

(00:00) Complexity is your enemy. Any fool can make something complicated. It is hard to keep things simple.-Richard Branson
(00:38) Today’s episode is about private equity.
(01:33) Roger reads an email from listener Dave with a question about investing in private equity.
(02:28) Roger says that this episode features his opinion and judgment on private equity.
(06:45) Don't think about private equity until you have a vision for what you want your retirement to look like.
(10:20) Consider the second order consequence of making an investment.
(12:00) Unless you are significantly overfunded and have an interest in private equity- Roger thinks private equity is unnecessary for creating a great life.

INTERVIEW WITH PETER LAZAROFF

(14:10) Introduction of Peter Lazaroff, author of Making Money Simple
(16:39) What is private equity?
(17:38) Who is traditionally invested in private equity?
(26:12) When markets are under stress, private equity correlations go a lot higher.
(27:49) What is the normal fee structure for investing in private equity?
(31:15) What you're seeing more often these days are semi-liquid funds that offer liquidity windows.
(34:30) There is no evidence to suggest that fewer companies going public is causing an issue.
(40:15) We can’t predict when a bad decade of returns is going to come.
(41:35) Peter: I am more concerned about implementing a bad idea than missing out on a good one.

SMART SPRINT

(42:39) In the next seven days, take a moment and remind yourself of the purpose of retirement planning which is to create a great life.

BONUS

(43:20) Roger reads an excerpt from his grandfather's WWII journal.

REFERENCES

Show notes created by https://headliner.app

Transcript

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0:00.0	Complexity is your enemy.
0:02.8	Any fool can make something complicated.
0:05.5	It's hard to keep things simple, attributed to Richard Branson.
0:12.3	Welcome to the show dedicated to helping you not just survive retirement, but to have the confidence because you're focused on the right things.
0:20.7	So you can go off and
0:23.1	rock retirement.
0:24.9	Today is not the show in the conversation I intended to have.
0:29.2	We're going to move that to next week in order for us to have a conversation that I would
0:34.5	like to address head on.
0:37.8	We're going to talk about should you have private equity as part of your retirement portfolio.
0:44.5	And the reason we're talking about this is this topic is coming up more and more.
0:49.4	A few weeks ago, I had a meeting with a client, and during the meeting they said,
0:54.0	hey, Roger, I read this
0:54.8	great book by Tony Robbins. It's called The Holy Grail of Investing. They talk about how the sophisticated
1:01.0	investors and institutions have used private equities, have great returns and no correlations,
1:07.0	et cetera, and why individual investors should have this as part of their portfolio.
1:13.0	And that opened up a great discussion for us to navigate that topic.
1:18.2	And then a few days ago, well, actually about a week ago now, I sat on it for a few days.
1:23.2	I received an email from a listener, David.
1:26.3	So here's the email, which is essentially the question
1:28.7	we're going to try to answer today for him and for you. David says, hey, Roger, I love your
1:34.4	podcast. In podcast 577, you spoke briefly about private equity. The way you spoke about it made me think
	...

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