America might have the biggest private-equity market, but Japan has the hottest. It is benefiting from the retreat from China https://t.co/35sBcp4vYiIllustration: Satoshi Kambayashi https://t.co/3Dc62bb3Mv ...

Private Equity & Retirement Savings - Private equity firms are increasingly targeting retirement savings as a source of capital [1] - The private equity industry manages $29 trillion in assets [1] Potential Concerns - The article title suggests a potentially negative view of private equity's involvement in retirement savings, hinting at a "grab" [1]

Japan’s dealmaking machine looks as cheap, nimble and reliable as a trusty Corolla or a Civic, while American private equity has become a bit of a clunker https://t.co/FZk7aoXdFR ...

Venture Capital Investment Strategies - Venture capital firms should consider taking companies public now, as current business models are creating high-margin businesses [1][19] - New allocators or investors need access to top decile managers to consistently achieve returns above the Public Market Equivalent (PME); otherwise, even top quartile performance is insufficient [1] - The venture industry is seeing a shift in partnership dynamics, with increased changes in partnerships over the past two years, driven by factors such as reduced compensation and a desire to avoid current market challenges [10] - The industry should be wary of multi-stage platforms, as the large fund sizes make it difficult to achieve the same returns as in the past [12] - The industry should be aware that thematic funds are approached agnostically, focusing on finding great partners with aligned skill sets rather than adhering to specific mandates [20] Endowment Management - Carnegie Mellon University (CMU) manages $4 billion on behalf of the university, with 85% allocated to equity and 15% to fixed income [6] - CMU targets 50% of its portfolio in privates (venture capital, private equity, real estate, natural resources, private credit) and the other 50% in hedge funds and liquids (public equities and fixed income) [6] - CMU is overweight venture by 5-10 percentage points compared to most endowments of its size and underweight hedge funds and real assets [6] - Endowments are facing headwinds, particularly those that may be subject to taxation, which could impact their draw and investment strategies [11] Venture Capital Fund Performance & Metrics - The median Internal Rate of Return (IRR) for mature venture capital funds is about 8% net, with the top quartile at 15%, and a Multiple on Invested Capital (MOIC) of about 25x [6] - Top quartile Distributed to Paid-In Capital (DPI) from 15-year vintage funds (1998-2015) is 18x [6] - A key question for new allocators is whether they will have access to top decile managers, as only those consistently achieve returns above the PME [6] - The industry should be aware that a 6x gross return is needed to achieve a 4x net return, considering fees of 25% and 30% for early-stage funds and 2% and 20% for growth funds [13]

Fundraising Trends - Private equity and credit fundraising is slowing down [1] - Hedge funds and crypto strategies are gaining momentum in alternative investments [1]

Puerto Rico’s new financial regulator is stepping up scrutiny of the island’s booming private equity industry, after her office recently shutdown one of the island’s largest players https://t.co/1vPP0emgjQ ...

Business Model & AI Application - Off Deal is building the world's first AI investment bank, reimagining the financial institution from first principles with a different org chart, compensation structure, and culture [1][2][3] - The company uses a proprietary data layer of 250 data fields on 2500000 (2.5 million) US businesses to identify potential sellers, leveraging AI to create Wall Street-grade decks for every small business owner [5][6] - AI is used to identify potential buyers, draft personalized outreach messages, manage NDAs, and drive productivity in complex workflows, acting as a "digital coworker" [6][7] Value Proposition - Off Deal focuses on deal certainty, better terms, and faster results for sellers, rather than explicitly pitching AI [9][10] - The company aims to create price discovery for small businesses, a multi-trillion dollar private asset class with wide bid-ask spreads [10] - By creating competitive tension among buyers, Off Deal can achieve higher outcomes for business owners, with one example showing a final offer 40% higher than the initial offer [10] Competitive Advantage & Strategy - The company believes that large banks are more likely to procure AI software than build their own, giving startups a shot at displacing incumbents with an AI-first culture [12] - Off Deal's bankers start talking to clients on day one, developing important skills, unlike the traditional investment banking model [12] - The company has a 1:1 ratio of bankers to engineers, fostering a tight feedback loop and high ROI on automation efforts [12] Financials & Compensation - Off Deal charges 5% of enterprise value on a success-only basis, aligning incentives with the business owner [12] - Most of the company's fees are between 500000 (500k) and 1000000 (1 million) dollars, with some sell-side mandates reaching 2000000 (2 million) or 3000000 (3 million) dollars [12] - Bankers receive 20% of the fee, potentially earning 200000 (200k) dollars per deal, and can make 2000000 (2 million) dollars in bonus if they do 10 deals a year [12] Future Vision - The company is exploring semi-automation for smaller transactions involving subscale small businesses, similar to Tesla's approach of scaling manufacturing capabilities [13] - Off Deal believes that human interaction will remain a core component of important life decisions, focusing on building technology around that constant [13] - The company's pitch to small businesses is that it creates a competitive auction among buyers, increasing the probability of selling the business and achieving the best terms and price [13]

As the world economy fragments, Japan’s private-equity market has one big advantage over its American counterpart: it benefits from the retreat from China https://t.co/z2kdShSWzy ...

Private-equity is not running well in America. Funds are struggling to exit profitably. Deal volumes have slumped. And new capital has become harder to raise.Across the Pacific, though, is a dealmaking machine roaring back to life https://t.co/vOnPh4jCmQ ...

Market Overview & Investment Strategy - Exponence, a multi-strategy investment firm, manages $22 billion in assets across equity, fixed income, and alternative investment strategies [1] - The firm believes the world is undergoing a regime change to a multipolar world, impacting long-term investment implications [5][6] - Exponence emphasizes understanding geopolitical constraints versus preferences when making investment decisions [19][20] - The firm leans towards a value-oriented investment approach, balancing fundamentals with environmental changes [21] Equity Market & AI - The market's earnings expectations for hyperscale AI companies are viewed with skepticism over the next one to two years [8][9] - It remains to be seen whether AI's productivity benefits will translate into sustained earnings for individual companies [9] International Markets - Europe is seen as an interesting market for the balance of the year due to fiscal space, reduced intracontinental barriers, and favorable regulatory environment [10][11] - The firm is bullish on European private equity and domestically focused sectors like telecommunications [12] Private Markets & Alternative Investments - Private markets are primarily an institutional play, with tailwinds for European small-cap and private markets [13] - Including private markets in long-dated target date or target risk portfolios for retail investors (through 401ks) is acceptable with appropriate guard rails [15]