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Rekenthaler Report

Should Private Investment Funds Be for Everyone?

Yes, but with a very large asterisk.

The SEC's Proposal
The headline's query was once asked specifically about hedge funds. Fifteen years ago, it was widely thought that that individual investors would benefit from owning hedge funds, which boasted better investment talent. Mutual funds hired the benchwarmers; the true stars were working for higher-paying hedge funds. That argument has dwindled as hedge fund performance has since languished.

But hedge funds are not the only private, unregistered investment pools. That universe also includes private-equity funds and venture-capital funds. Such investments have better retained their reputations, such that several private-equity managers have felt emboldened enough to lobby the SEC to permit private equity be sold into 401(k) plans.

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