CRAZY PILLS
This is what the *Democratization of Alts* looks like?
Re: Bloomberg reports that Blackstone has bought $5 billion in PE stakes from the NYC Pension System.
If you were a retail private secondaries investor, would you rather own:
1. The PE funds that the Ivies used to own, or maybe,
2. The PE funds that NYC pension system used to own?
Or maybe you will get really lucky, and they will turn out to be the same thing?
Anyway, congratulations to Blackstone and its secondary PE fund investors! They just got a nice windfall gain(?-unrealized, of course), likely hundreds of millions of dollars, thanks to those juicy NAV markups.
If you are prospective investor in the Blackstone funds that were lucky enough to get an allocation, the NAV juice from the NYC buy will very likely have already been squeezed: for example, see the 10-Q for the Blackstone Private Equity Strategies Fund:
“Investments in affiliated or unaffiliated investee funds (“Investee Funds”) are generally valued using the reported net asset value (“NAV” or “Net Asset Value”) of the Investee Funds as a practical expedient for fair value.”
Don’t you wish you had acted sooner 😊?
What do you get when:
1. A practical expedient (i.e. NAV marking because it’s easier), collides with
2. A profit motive (NAV marking to get great performance and market the product) collides with:
3. An apparent lack of scruples?
What it LOOKS LIKE you get is:
The 2025 Private Secondaries Ponzi-(esque) Party!
Just MAKE SURE that those retail inflows keep coming. If the asset managers run out of things to buy, future performance from will surely be less impressive; they won’t be able to do any NAV Squeezing!
Can someone please tell us if we are misinterpreting the situation? WE FEEL LIKE WE ARE TAKING CRAZY PILLS!
https://www.sec.gov/Archives/edgar/data/1930054/000119312524138195/d788809d10q1.pdf
https://www.bloomberg.com/news/articles/2025-05-27/blackstone-buys-5-billion-in-pe-stakes-from-new-york-pensions?embedded-checkout=true