Nesbitt: Manager selection drives returns in VC far more than beta
Steve Nesbitt · Stephen Nesbitt – Innovation in Private Markets for RIAs (EP.410) · Oct 7, 2024 · at 12:17
Stephen Nesbitt, CEO and CIO of Cliffwater, explains how manager selection and alpha concentration vary across alternative asset classes compared to public markets.
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“In venture, you can make the right asset allocation decision, but if you can't get the best managers, or at least the top quartile managers, it's not going to matter. It's not going to deliver. That's most true in venture, maybe a little less so in buyout and hedge funds, but unlike the public asset classes where you get 99% of your return from beta, you get the majority of your return from manager selection or alpha in the case of those asset classes.”
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