2 Cautionary Tales from Private Equity and Private Credit Markets

Two high-profile cases in the public/private markets are testing boundaries and investors.
According to publicly available information, ERShares Private-Public Crossover ETF’s XOVR (morningstar.com/etfs/xnas/xovr/quote) stake in illiquid holdings, including SpaceX, has apparently exceeded the SEC’s 15% threshold set forth in SEC Rule 22e-4. Morningstar refers readers to the text of the rule to understand the implications of this development.
But first, let’s start with ERShares’ saga. Morningstar’s Managing Director of Manager Research Jeff Ptak (morningstar.com/people/jeffrey-ptak) has been tracking the firm and its crossover fund.
Lessons From a Private Markets Bust: Why This ETF’s Investors Missed Out on SpaceX Gains (morningstar.com/alternative-investments/lesson…)
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On this episode:
00:00:00 Welcome [This part of the episode includes a clarification: According to publicly available information, ERShares Private-Public Crossover ETF’s XOVR stake in illiquid holdings, including SpaceX, has apparently exceeded the SEC’s 15% threshold set forth in SEC Rule 22e-4. Morningstar refers readers to the text of the rule to understand the implications of this development.]
00:01:24 How XOVR ETF Differs From Typical ETFs
00:02:11 XOVR ETF Performance Versus Broader Stock Market
00:02:48 Why XOVR’s SpaceX Stake Swung Sharply
00:09:56 Blue Owl Capital’s Origins and Current Problems
00:13:25 Who Invests in Blue Owl’s Direct Lending Funds
00:18:09 Investor Lessons From Blue Owl’s Redemption Halt
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