Top and even median private asset returns of most asset classes cannot be accessed via public proxies
I'm Mark Machin. I was formerly the president and CEO of the Canada Pension Plan Investment Board, or CPP Investments. You can get close to what you do in private markets through public markets, but it's not perfect, and you're missing out on all the value-add that these fund managers can apply to these assets, which you're not going to get through investing in public markets. To some extent, it is true that the returns from private equity can be replicated through leveraged small-cap stocks, and you can replicate the average returns of private equity as an asset class through, you know, theoretically through a portfolio of leverage small-cap stocks. However, you can't replicate top quartile funds or even probably the top half of funds through doing that. The reason why the funds like CPPIB invested in private assets, even though theoretically you could replicate the average returns, we felt we could do much better than average returns. So by capital research, by capital analysis, we felt we could pick top quartile funds and get access to those funds. If you're doing that, then it's impossible to replicate. Private credit is probably a much wider range of types of credit that you can get exposure to through privates than there is in the public markets through specialty lending different parts of the capital stack. There are different types of, you know, commercial leasing or other types of credit exposure that are just broader than you're going to get purely through investing in public credit, and I think the same probably across, you know, other asset classes. So it's very hard to replicate venture returns simply through public investing.
Across all of these sleeves, I don't think you can replicate top quartile manager returns by simply investing in public markets.