In a recent ION Influencers Fireside Chat, Edward Talmor-Gera, CEO at Newvest, shared his unique journey into private equity, emphasizing his academic roots and personal connections that led him to the industry. He highlighted his early career, including his MBA at London Business School and his initial foray into private markets under the mentorship of Professor Ellie Talmor.

Founding Newvest: Edward explained the inception of Newvest, a company designed to offer a passive, index-like approach to private markets. He detailed the innovative business model that allows investors to gain diversified exposure to private equity and private debt without the traditional high fees associated with fund-of-funds.

Newvest’s Unique Value Proposition: Newvest aims to democratize access to private markets by creating annual baskets of the largest funds in specific asset classes. Edward discussed how this model provides a low-cost, diversified investment option, akin to index funds in public markets. He also highlighted the disruptive business model of Newvest, which charges no management fees and only a low carry fee.

Challenges and Market Education: Edward addressed the challenges of educating the market about the benefits of passive investment strategies in private markets. He emphasized the importance of complementing active management with passive strategies to optimize portfolio construction.

Frustrations in the Industry: The discussion touched on the frustrations faced by both General Partners (GPs) and Limited Partners (LPs) in the private equity space. Edward highlighted issues such as the double layer of fees in fund-of-funds and the extensive due diligence processes that can be burdensome for GPs.

Transparency and Data Insights: Edward argued that private markets can offer a high level of transparency, often surpassing that of public markets. He shared insights on how Newvest leverages data from its investments to provide valuable information on sector exposure, geographies, and other metrics.

Future of Private Markets: Looking ahead, Edward discussed the potential for further innovation in private markets, including the creation of more niche investment products and the introduction of liquidity solutions. He expressed optimism about the growing acceptance of passive investment strategies and the potential for Newvest to lead this transformation.

Conclusion: The fireside chat concluded with Edward’s vision for the future of private markets, emphasizing the coexistence of public and private markets and the complementary role of passive investment strategies.

Key Timestamps:

00:08 Introduction to the Fireside Chats
00:40 Edward’s Background and Entry into Private Equity
01:53 Transition from Academia to Private Markets
03:11 Understanding Newvest Business Model
06:09 Milestones in Creating the Index
08:05 Frustrations in the Private Equity Landscape
12:12 Addressing Exclusivity and Co-Investment Issues
13:21 Transparency in Private Markets
15:16 Insights from the Index and Data Collection
16:30 Future Product Development Plans
18:14 Challenges in Liquidity for Private Markets
19:48 Investment Minimums and Accessibility
20:27 The Future of Private vs. Public Markets
21:47 Concerns Over Commoditization in Private Markets
23:31 The Role of Major Players in Private Market Indexing
24:05 Conclusion and Future Outlook