39 - Why most investors are underweight venture capital with Brian Moretta of Hardman & Co

In this episode the tables are turned as the usual host, Brian Moretta, has recently published a paper on how venture capital fits into retail investor portfolios, with some surprising results. Andrew Aldridge steps into the host seat to discuss the paper.

The heart of the paper is the consequences of venture capital being a diversifying asset compared with equity and bonds. Brian discusses what this means for investors and how investors can increase expected returns on their portfolios without taking any additional risk by adding venture capital in the right way. There are consequences for the overall asset allocation which are easily dealt with, but are important.

They also talk about several other areas covered in the paper. The analysis initially shows the benefits are significant without tax reliefs, but also look at what happens when these are added. The genuine exceptions get discussed, as well as common misoconcpetions. These include the pension fallacy, the idea that pensions should be filled first, and the idea that high risk investments are only for high-risk investors - both are demonstrably false.

Hardman & Co website: https://www.hardmanandco.com/

Link to white paper: https://www.hardmanandco.com/tes-white-paper-how-much-should-clients-invest-in-venture-capital/

Thanks to our white paper sponsors: SyndicateRoom, One Four Nine Wealth, Nova Growth Capital and Deepbridge Capital. Thanks also to Andrew Aldridge, Head of Marketing at Deepbridge, for interviewing so ably.

Suggested books:

The Choice by Edith Eger

Trust Me I'm Lying by Ryan Holiday