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10X Capital Podcast
E45: Lindel Eakman on Whether Venture Capital Returns are Higher than Hedge Funds, Private Equity, and Buyout
Feb 27, 2024
Lindel Eakman, a seasoned venture capitalist, shares his wealth of experience in investment strategies and LP returns. He discusses why venture capital often outperforms hedge funds and private equity, emphasizing its superior risk-return profile. Key topics include the significance of cultural fit and trust in partnerships, the impact of generational transitions, and the role of university endowments as major limited partners. Eakman also dives into the challenges of backing emerging funds and the critical balance between risk and financial conservatism in investment strategies.
36:20
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Quick takeaways
- Venture capital significantly outperforms public equity benchmarks by 300 to 700 basis points, showcasing its superior risk-return profile for skilled investors.
- The successful generational transfer within venture capital firms hinges on strong internal relationships and a well-defined culture that promotes collaboration.
Deep dives
Venture Capital as a Premier Asset Class
Venture capital is regarded as one of the best-performing asset classes due to its favorable risk-return profile. Investing predominantly in venture capital can significantly outperform public equity benchmarks by 300 to 700 basis points, depending on the investor's skill level. The speaker notes that small growth equity is the only other asset class that comes close in terms of performance. This substantial return potential, combined with its historical success over two decades, solidifies venture capital's position as a leading investment choice.
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