Famed buyout firm KKR & Co.
is entering the mutual fund business
, and Chuck Jaffe of MarketWatch
has written a new column
warning investors to stay away.
Jaffe is suspicious of the wave of hedge funds and PE firms entering the funds business, and wonders why a firm that has traditionally only been open to institutions and the wealthy would allow ordinary investors to get in on the action.
"[T]o see KKR and and other firms aggressively promoting hedging- and alternative-investment strategies to Main Street investors should make astute individuals hide their wallets," Jaffe writes.
The high-fee funds model doesn't give investors a strong return, Jaffe writes. Yet he notes that not all new PE- or hedge fund-backed funds are losers. The Blackstone Group
's Apollo Senior Floating Rate
fund, opened last year, is up 17 percent year to date.
"Still, when the barbarians open their gates to you, it might be time to wonder if you are being led to the slaughter," Jaffe writes. Read the full column here
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