The FT article Australia’s pension titans set to storm private capital markets discusses how “Super-sized Australian pension funds that collectively control more than $2tn are expanding their in-house investment teams to join up with or even bypass private equity firms to place big bets on companies directly.”
It is a question about what you can do for yourself and what you need to delegate to others.
Why would these pension funds cut out middlemen? “But with high fees dragging on returns, some big institutional investors have started to invest in companies alongside private equity firms — or even cutting them out and investing directly.”
Why is this important? Private investors need to step up and decide what they can do for themselves and what they need to delegate to other managers. If you delegate to other managers, is the cost too high?
If you delegate o others, it will cost on average about 2.5% each year. If you are happy with that cost, that’s fine. If you are not, you have to decide how to do more yourself.