[Best Of Investology] Equity performance triples when it goes private? Featuring Neuberger Berman | The Skeptic's Guide to Investment Management

Welcome to the Skeptic’s Guide to Investment Management. In each episode, we examine one industry publication through a skeptical, logical, evidence-based lens, with the help of Tim McGlinn, ex-investment consultant, portfolio manager and professor of finance, and founder of the TheAltView . We discuss a Neuberger Berman 2025 report pitching alternative (private) investments in 401(k) plans. The “illustrative” report assumes private equity chosen by Neuberger Berman earns 15.30% per year after fees for 40 years, while US large caps return just 5.77% after fees—making a 10% private equity allocation look like an easy way to retire richer. The private equity boost relies on assuming investors can invest only via co-investments (lower fees), which Tim says isn’t realistic because you typically need to be an LP in funds to access them. They also note the equity forecast is dragged down by assuming active-manager fees and persistent underperformance for decades—odd for a firm selling active equity. Tim contrasts this with AQR assumptions showing private equity (5.1%) below US equities (6.5%). Key takeaway: any 15% long-term promises is an alarm bell. Link to Tim’s original article Neuberger Berman & Alternative Investments More content like this on Substack and YouTube: YouTube: https://www.youtube.com/@investology\_podcast Investorama TheAltView Find us on LinkedIn George: https://www.linkedin.com/in/george-aliferis/ Tim: https://www.linkedin.com/in/tim-mcglinn SGIM is an Investology podcast series, produced by Orama: https://orama.tv/ *MUSIC CREDITS* *Brandenburg Concerto No4-1 BWV1049 - Classical Whimsical by Kevin MacLeod is licensed under a Creative Commons Attribution 4.0 license. https://creativecommons.org/licenses/by/4.0/* *Source: http://incompetech.com/music/royalty-free/index.html?isrc=USUAN1100303* *Artist: http://incompetech.com/* This is a public episode. If you would like to discuss this with other subscribers or get access to bonus episodes, visit investorama.substack.com