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Meet the Man Behind the Largest Private Investment Fund, Part II

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When the 59-year old head of Softbank, Masayoshi Son, met with the 31-year old deputy crown prince of Saudi Arabia, Mohammed bin Salman (MbS) for 45 minutes in Tokyo, MbS committed $45 billion to Son’s Vision Fund.  “Forty-five minutes, $45 billion,” Son said in September. “One billion dollars per minute.”

That caught the attention of the investment industry—where your value is measured by your next deal—the fear of missing out is a powerful emotion.

Perhaps motivated by the easy money being raised by funds like the Vision Fund, BlackRock has announced it is offering a $10 billion “Long Term Private Capital” fund.

It’s a drop in the bucket considering the company manages $6 trillion mostly in passive indexing type funds. But the appeal of easy money is hard to resist.

The fund will be overseen by Mark Wiseman. He has hired Andre Bourbonnais to help run the fund. Bourbonnais was the former chief executive of Canada’s Public-Sector Pension Investment Board where he and Wiseman worked together for nine years. Do you see where this is going?

I’ve written to you about my concerns with pensions many times, including here, here, and here.

It would be rich to assume teachers and firemen would be comfortable with their retirement money funding this type of arrangement.

Now then, why would BlackRock do this since their passive indexing approach is their bread and butter? Well, BlackRock’s CEO, Larry Fink, comes from the private equity world, and his firm was, at one point, part of the Blackstone Group. Maybe indexing is too boring. I can’t imagine someone like Vanguard founder Jack Bogle doing something like this when he was at the helm.

It’s worth asking, who is watching out for the average investor when it has been shown that the actual performance of the average investor is far less than the funds they’re investing in?

I want you to pay attention to the undercurrent in this story and ask: Who is watching out for you when the guys at the top are dealing?

Make sure you have a plan in place today to help you get through tough times. We might look back at “$45 billion in 45-minute” as the beginning of the end.

Click here to read Part I of Meet the Man Behind the Largest Private Investment Fund.

The David Rubenstein Show: Masayoshi Son

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E.J. Smith - Your Survival Guy

E.J. Smith is Founder of YourSurvivalGuy.com, Managing Director at Richard C. Young & Co., Ltd., a Managing Editor of Richardcyoung.com, and Editor-in-Chief of Youngresearch.com. His focus at all times is on preparing clients and readers for “Times Like These.” E.J. graduated from Babson College in Wellesley, Massachusetts, with a B.S. in finance and investments. In 1995, E.J. began his investment career at Fidelity Investments in Boston before joining Richard C. Young & Co., Ltd. in 1998. E.J. has trained at Sig Sauer Academy in Epping, NH. His first drum set was a 5-piece Slingerland with Zilldjians. He grew-up worshiping Neil Peart (RIP) of the band Rush, and loves the song Tom Sawyer—the name of his family’s boat, a Grady-White Canyon 306. He grew up in Mattapoisett, MA, an idyllic small town on the water near Cape Cod. He spends time in Newport, RI and Bartlett, NH—both as far away from Wall Street as one could mentally get. The Newport office is on a quiet, tree lined street not far from the harbor and the log cabin in Bartlett, NH, the “Live Free or Die” state, sits on the edge of the White Mountain National Forest. He enjoys spending time in Key West and Paris. Please get in touch with E.J. at ejsmith@yoursurvivalguy.com