How Goldman Sachs Picks Top Funds (Out of 700 Managers a Year)
Speakers
Summary
- The "Democratization" of Alts: There is a secular shift of alternative investments (PE, Credit, Real Assets) moving from purely institutional balance sheets to individual wealth portfolios. Institutions have reached their allocation caps, forcing managers to seek capital from private wealth.
- The Liquidity Crunch in PE: Private Equity holding periods have extended from 3-5 years to ~7 years. This lack of exits/distributions is creating a massive opportunity for Secondaries (funds that buy existing PE stakes) to provide liquidity.
- Infrastructure is the New Growth: Infrastructure is no longer just "boring" roads/bridges; it is now a technology play. The massive power and construction needs for AI and data centers are driving a renewed bull market in real assets.
- The "Semi-Liquid" Risk: A major concern is the rise of "evergreen" or "semi-liquid" private credit/equity funds for retail investors. While they offer quarterly liquidity (usually capped at 5%), sentiment-driven runs on these funds could force gating, trapping capital.
Trade Ideas
"Private equity firms are stuck with assets that are now going on kind of seven years... Secondary funds have the ability to step in and really capitalize on this current dynamic." The "Liquidity Crunch" in private equity forces GPs and LPs to sell stakes at discounts. The largest players in the Secondaries market (Blackstone's Strategic Partners, Carlyle's AlpInvest, Ares' Landmark, KKR) are the buyers of choice. They get assets at a discount and are the solution to the industry's liquidity problem. Long the alternative asset managers with dominant Secondary platforms. A severe recession could mark down the underlying portfolio values (NAV) of the assets they are buying, regardless of the entry discount.
"A lot of the infrastructure needs are currently being driven by some of our technology innovations... whether it's more power that we need for data centers, right, data center construction." "Infrastructure" is now a derivative trade on AI. To support LLMs, you need physical Data Centers (EQIX, DLR) and massive amounts of electricity/power generation (VST, CEG). These "Real Assets" have inflation-linked contracts and secular demand growth. Long Data Center REITs and Power Producers/Utilities. Regulatory pushback on power consumption or a slowdown in AI capex spending.
"You got funds like DXYZ... It'll be curious to see how these in my mind this mismatch of liquid illquid gets handled... Do you think the Robin Hood fund is going to hit a 25% premium or discount first? I imagine it'll do both." Closed-end funds holding private assets (like SpaceX or OpenAI) often trade at massive dislocations to their Net Asset Value (NAV). Meb highlights the extreme volatility and "strangeness" of these vehicles. Watch for extreme dislocations (deep discounts to buy, massive premiums to sell/short), but avoid as a passive hold due to premium risk. Buying at a 100%+ premium (as seen historically) guarantees underperformance relative to the underlying assets.
"Concerns around how AI is going to potentially, you know, disintermediate and disrupt, you know, traditional software investing that was happening in the private markets." The traditional Private Equity playbook (buy a B2B SaaS company, optimize margins, sell) is under threat. AI agents may replace seat-based software licenses. This creates a headwind for legacy Software/SaaS baskets. Watch/Neutral on broad software indices; be selective against companies easily disrupted by AI automation. AI adoption might be slower than expected, allowing legacy software companies to pivot and integrate AI successfully.
Up Next
This Meb Faber Show video, published March 06, 2026, features Kristen Olsen, Meb Faber discussing BX, CG, KKR, ARES, EQIX, DLR, VST, CEG, DXYZ, IGV. 4 trade ideas extracted by AI with direction and confidence scoring.
Speakers: Kristen Olsen, Meb Faber · Tickers: BX, CG, KKR, ARES, EQIX, DLR, VST, CEG, DXYZ, IGV