AQR’s Next Big Move Could Be Into Private Equity

The transcript discusses the concept of the private world in investing, highlighting the necessity of private equity as an asset class. It explores the jealousy towards private equity's lack of mark-to-market requirements and considers the potential benefits of illiquidity. The speaker speculates on whether illiquidity could be a feature rather than a bug, suggesting it might lead to better investor behavior. Challenges in diversification within private equity are addressed, including the lemons problem. The transcript concludes with thoughts on future prospects and the need for systematic processes in private equity investment.

What is the speaker's perspective on the necessity of the private world in a free enterprise economy?

• It is unnecessary and should be eliminated.

• It is essential and must exist.

• It is a temporary phase.

• It is only beneficial for large corporations.

How does the speaker view the lack of mark-to-market requirements in private equity?

• As irrelevant to investment decisions.

• As a feature that makes them envious.

• As a reason to avoid private equity.

• As a disadvantage that should be addressed.

What potential benefit does the speaker suggest illiquidity might have for investors?

• It allows for more frequent trading.

• It encourages long-term investment commitment.

• It reduces investment risks.

• It increases transparency in investments.

What is the 'lemons problem' mentioned by the speaker in the context of private equity?

• The problem of excessive regulation.

• The challenge of high investment fees.

• The difficulty in finding quality investments.

• The issue of limited market access.

What is the speaker's attitude towards finding a systematic process for investing in private equity?

• They think it is already well-established.

• They find it intriguing but challenging.

• They are uninterested in pursuing it.

• They believe it is impossible.