Nesbitt: Institutional consulting is an undifferentiated, zero-growth industry
Steve Nesbitt · Stephen Nesbitt – Innovation in Private Markets for RIAs (EP.410) · Oct 7, 2024 · at 17:33
Stephen Nesbitt, CEO and CIO of Cliffwater, explains why his firm pivoted away from traditional institutional investment consulting toward private credit management.
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“The consulting business, in a sense, from a business perspective, has gotten very concentrated and virtually zero growth, where you probably have five, maybe 10, but not much more than that, really sharing the pie amongst themselves. Sometimes it seems to be a zero sum game there, and it competes on fees. All these top firms Very qualified, very good, have very good people, but the problem is they're not very differentiated, and it's questionable whether they're really adding a lot of value other than education and check the box on fiduciary oversight. It's a very tough business. Margins are very low, single digit, zero growth.”
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