Matt Levine’s Money Stuff: Private Equity Wants Your 401(k)

Private equity in 401(k)s

The first-principles theory of a lot of private investments goes roughly like this:

1. There are a lot of investment opportunities that are, for more or less good reasons, illiquid. If you invest money in an early-stage startup, you are making a long-term bet on its success, and you don’t expect to know anytime soon if your bet is right. It would be weird to sell your investment a week after making it, in a way that it would not be weird to buy Nvidia stock today and sell it in a week. If you buy a ...