This week, we (Alex Steger and Alex Rosenberg) realized that we have different views about a big trend we’re seeing in the fund management space. Instead of settling our differences privately like adults, we decided to fight about it here, in this column, for all to see! Get ready for some vicious Alex-on-Alex action…

Steger: The big news this last week has been T. Rowe and Franklin both buying private equity / credit shops. They are by no means the first asset managers to do this, and pretty much all ‘traditional’ asset managers are clamoring to get into this space. In short – I’m cynical / skeptical / have questions.

Rosenberg: Why?

Steger: Don’t get me wrong, I think private assets have their place in portfolios (a point I’m sure we’ll come back to) but this seems about asset managers’ businesses rather than necessarily about the end client. These firms (like many asset managers) are getting hit hard by passives, don’t have big ETF businesses, and need something that still has decent fees, sticky assets etc. And PE / PC does just that.

Rosenberg: Private assets are also growing in popularity, at a time when the business of actively managing publicly traded equities is shrinking (albeit more slowly than some have predicted). Aren’t these fund companies just giving the people what they want?

Steger: But is it what they want? Or is it what the asset managers want? Traditional PE shops (Blackstone, etc.) are also making plays to get into the retail /…

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