Are funds safer than single asset deals?
On the pros & cons of fund vs single asset LP investments
Welcome back and happy Friday!
“Invest in our fund, it’s safer because we provide you diversification across a bunch of deals”
I’m sure I’m not the only one who has heard this argument, whether it came from a fund or a feeder fund (I recommend you spend some time reading about the latter here).
Today we’ll dissect to which extent it’s true – perhaps single asset deals don’t make as much sense and LPs should focus more of their time on funds?
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First, I want to remind you of the three pillar framework – it’s a good idea to at least glance at these articles before you continue to familiarize yourself with how I view and analyze LP investments.
The only way to compare one deal to another is to compare it across these pillars – and the same holds true if you’re comparing a single asset deal to a fund with the exception of ONE variable – discretion.
What do I mean?