Dry Powder: The Private Equity Podcast A $140 Trillion Riddle, Wrapped in a Mystery, Inside of an Enigma
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May 27, 2025 
Ashby Monk, the executive director of the Stanford Research Initiative on Long Term Investing, dives into the intricate world of long-term investing, focusing on pension funds and sovereign wealth funds. He discusses the substantial impact these entities have on the economy, revealing their $140 trillion influence. Monk also highlights the complexities of private equity, including regulatory challenges and the importance of relationship dynamics between limited and general partners. His insights underscore the need for innovative partnerships that prioritize both wealth creation and societal good.
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Civil Society Investor Insight
- Pension funds, sovereign wealth funds, and endowments are civil society organizations optimizing for goals not obvious to casual observers.
- They sit between government and business, investing over $140 trillion globally, larger than the stock market capitalization.
Know Your LP's Context
- GPs need to understand LP asset allocation and implementation preferences before pitching.
- Know specific rules like fee reporting in Australia and the career risk LPs face with innovation.
LPs' Decision Criteria
- LP investment decisions involve thorough memos detailing strategy fit, due diligence, persistence of returns, and capacity constraints.
- Sustainability is crucial and viewed as fiduciary duty, not politics, given their long-term investment horizons.