Quote · Excess Returns
We Asked GMO’s Head of Asset Allocation Why This Bubble is Easy — But Investors Will Get it Wrong
Where this was said
How public portfolios can offset private equity risks
At 1:02:50 · chapter starts 1:02:00
Ben Inker recommends going long S&P 100 / short Russell 2000, and biasing public portfolios toward quality to offset the hidden small-cap junk bet embedded in most private equity allocations [1] — Ben Inker "If your private equity portfolio is secretly a bet on small-cap junk, the public portfolio fix is to go long S&P 100 (large, high-quality) …" 1:04:50 .
For the average US endowment or foundation, roughly half of equity exposure comes from private equity, creating a massive hidden bet on small-cap, lower-quality companies.
