CalPERS' Yu (Ben) Meng, Chief Investment Officer, Investment Office, discusses valuing private investments using model-based appraisals
Board of Administration Investment Committee meeting, December 16, 2019
At 1:20:40 in the video below, Yu (Ben) Meng, Chief Investment Officer, Investment Office, CalPERS, discusses valuing investments using model-based appraisals in private markets.
1:20:40 "In private markets, since its private not traded on an exchange, so they are marked, they are reporting less frequently, the valuation is really based on a model valuation not really a market transaction, and many times the valuation is delayed, so not timely valuation, so when it's not a timely valuation it provides a time diversification as well, so the risk reduction from private markets really coming from two folds: one is alpha components that is diversifiable, the idiosyncratic risk, and the other one is beta, the valuation, the marking, is less frequent and is marked based on the model, appraisal based, not so much about market transaction based."
Thank you to Jason Zweig and Dan Rasmussen for highlighting this video.
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The video above did not save at 1:20:40. Channeling Elon Musk after the Cybertruck's first window broke, I will try again: https://youtu.be/qFIcakrlowE?t=4841