Private Markets Get Their Vanguard Moment as NewVest Launches First True Index Funds
- Editor
- Jan 11
- 2 min read
Updated: Mar 29
What's New In a recent Fund Shack podcast interview with NewVest's founder Edward Talmor-Gera and Director Matthew Chapman, the company revealed it has created the first true index funds for private markets, offering passive exposure to the 50 largest private equity and private debt funds each year with no management fees. The company has secured unprecedented access to elite funds like Blackstone, KKR, and Carlyle, allowing smaller tickets below standard minimums.
Why It Matters
This innovation challenges the traditional active-only approach to private markets investing, potentially disrupting the multi-trillion dollar industry by offering a more efficient, lower-cost way to access private markets that has historically outperformed most active strategies.
Key Quotes
Access: "Please let me be your best LP ever... I promise I'll be your easiest" - Edward Talmor-Gera on approaching top private equity firms
Performance: "70% of funds in any vintage year in private equity end up being below the average" - Edward Talmor-Gera
Evolution: "All roads lead to indexing... if you're worried about this why don't you index" - Matthew Chapman recalling NewVest's founding vision
Big Picture Drivers
Efficiency Gap: Traditional fund-of-funds have historically delivered sub-pooled returns while charging significant fees
Market Evolution: Private markets following public markets' 50-year journey toward passive investing adoption
Democratization: Growing demand for private market access among both institutional and individual investors
By The Numbers
Growth: NewVest went from 0 to $43 million AUM in less than 24 months
Coverage: Achieved 98% access to target funds in first year, 100% in second year
Returns: Historical pooled returns show 300 basis points of alpha over median returns over 20 years
Key Trends to Watch
Adoption: Potential for 20-30% of institutional allocations to shift to passive within 3-5 years
Products: Expansion into sector-specific indices including clean tech, geography-focused funds
Secondary Market: Development of more efficient secondary trading mechanisms for index fund shares
The Bottom Line For Investors Passive private market investing offers institutional and qualified individual investors a way to access the consistent outperformance of pooled returns while reducing fees, minimizing manager selection risk, and maintaining true private market exposure - potentially marking a transformative moment for the industry.
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