Investing in PE Funds: The Grass Isn’t Always Greener 8-26-25 - Becker Private Equity & Business Podcast

Summary3 min read

Becker Private Equity & Business Podcast

Episode Title: Investing in PE Funds: The Grass Isn’t Always Greener

Host: Scott Becker
Date: August 26, 2025

Episode Overview

In this concise solo episode, Scott Becker reflects on his personal journey of investing in private equity (PE) and venture capital (VC) funds. Through candid storytelling, he challenges the common perception that entering the world of PE investing is an automatic ticket to superior wealth and status. Becker highlights the practical realities of these investments and suggests that the allure of PE may not always be justified when compared to more traditional investment approaches.

Key Discussion Points & Insights

Perception vs. Reality of Private Equity Investing

Aspirational Entry: Becker shares that growing up, and even after achieving financial success, he viewed investing in private equity and venture capital as a mark of having "arrived" among elite investors.
- “I thought this was, you know, I’d finally arrived. I’m able to invest with the big players, the big guys and so forth…” (00:20)
Cultural Influence:
- Recalls the term “mockers” from his neighborhood, representing big winners or influential players by investing in PE and VC funds. (00:31)

The Grass Isn’t Always Greener

Mixed Returns:
- Becker is candid about the reality that private equity fund returns are highly variable:
  - “The grim reality of private equity funds is returns are all over the board. Different funds perform very differently.” (00:44)
- Emphasizes the famous investment axiom:
  - “Yesterday’s results are no assurance of tomorrow’s success. There is no truer phrase.” (00:55)
Liquidity Constraints:
- Points out that investing in PE often results in money being “locked up” for years, reducing flexibility compared to public market investments. (01:01)

Reflection & Comparative Value

S&P Index Performance:
- Becker admits that, in many cases, his returns over the last five years would have been just as solid sticking with S&P index funds—a simpler, more liquid option. (01:10)
- “It would have been just as well off over the last five years investing in the S and P indexes, which is my core investment, versus this kind of stuff.” (01:13)
Final Thought:
- The episode closes on the central theme: chasing prestige investments in private equity isn’t a surefire path to better results, and often the traditional path can be just as rewarding.

Notable Quotes & Moments

On Chasing the Private Equity Dream:
- “It was always like, that’s the promised land. The people that do that, they’re big players, they’re winners, they’re mockers.” — Scott Becker (00:29)
On The Reality Check:
- “I felt like the dog who caught the car. You finally catch the car and realize the car is not so excited to catch.” — Scott Becker (00:41)
On Returns and Risk:
- “Returns are all over the board. Different funds perform very differently.” — Scott Becker (00:44)
- “There is no truer phrase… yesterday’s results are no assurance of tomorrow’s success.” — Scott Becker (00:55)
On Opportunity Cost:
- “It would have been just as well off over the last five years investing in the S and P indexes, which is my core investment, versus this kind of stuff.” — Scott Becker (01:13)

Important Segment Timestamps

00:00 – Introduction & context for PE investing focus
00:20 – Personal story: Aspiration to invest in private equity
00:41 – Reflection: The reality isn’t as glamorous (“dog who caught the car”)
00:44 – Warning: Variability of PE fund returns
00:55 – Timeless investing truth: Past performance offers no guarantees
01:10 – Comparative reflection: S&P index vs. private equity
01:25 – Conclusion & wrap-up

Summary

Scott Becker delivers an honest, experience-based take on the realities of investing in private equity and venture capital funds. Rather than unqualified praise, he cautions listeners to weigh the true costs, risks, and rewards—including the often-overlooked advantages of simple, broad-market investment options. In Becker’s words, the “grass isn’t always greener,” and sometimes, tried-and-true investment approaches can serve just as well or better.

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Transcript1 lines

[00:00]
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This is Scott Becker with the Becker Business Podcast and the Becker Private Equity Podcast. Today's discussion is investing in private equity funds. The grass isn't always greener. So here's the deal. I don't want to overly harp in this, but didn't grow up with money. Later in life, made some money and was able to finally invest in private equity funds and venture capital funds. And I thought this was, you know, I'd finally arrived. I'm able to invest with the big players, the big. The big guys and so forth, you know, and not crazy amounts of money, but putting some money into private equity and venture capital funds. And it was always like, that's the promised land. The people that do that, they're big players, they're winners, they're mockers. A phrase that we used to use in my neighborhood. Mockers. And what I found was, over time, that the grass isn't greener. In fact, I felt like the dog who caught the car. You finally catch the car and realize the car is not so excited to catch. The grim reality of private equity funds is returns are all over the board. Different funds perform very differently. Like the phrase, yesterday's results are no assurance of tomorrow's success. There is no truer phrase. I have found myself locked up in a lot of private equity funds. It's gone fine and with great funds, but it would have been just as well off over the last five years investing in the S and P indexes, which is my core investment, versus this kind of stuff. In any event, the grass isn't always greener. The story of investing in private equity funds. Thank you for listening to the Becker Private Equity Podcast. The Becker Business Podcast.