Episode summary
The Long View: Leyla Kunimoto - Why Investors in Private Markets Need a Louder Voice
The Long View
· · 53 min · Hosts: Amy Arnott, Jeff Pac · Guests: Ila Kunumoto
Summary
Ila Kunumoto argued that private markets need more independent scrutiny because most information comes from general partners or the wealth channel, leaving individual investors without a clear voice. She said Accredited Investor Insights was created to examine private equity, private credit, and real estate from the limited partner perspective, especially where disclosure is thin and incentives can blur the picture.
On private credit, she said the recent bankruptcies are a warning sign rather than isolated events. In her view, aggressive fundraising, easy money, and looser underwriting deserve attention even if the sector is not a systemic threat like 2008. She pointed investors to payment-in-kind usage, nonaccruals, and fund leverage and maturity schedules as the most useful stress indicators.
On private equity and secondaries, she criticized PME and IRR as incomplete measures and said DPI has fallen because exits are slowing. She also pushed for better disclosure around how secondaries are marked, how cost basis is shown, and how liquidity actually works for retail buyers, warning that many private-market products remain far less liquid than they appear.
Key takeaways
- Kunumoto said private credit stress is best monitored through payment-in-kind levels, nonaccruals, and borrower leverage rather than headline defaults alone.
- She argued the recent First Brands and Renovo cases are a "canary" for looser underwriting in private credit, even if the whole market is not a 2008-style systemic risk.
- She said PME and IRR can mislead private equity investors because capital is called and returned in chunks, making apples-to-apples public-market comparisons imperfect.
- Kunumoto said DPI is at its lowest in over a decade because exits are slower and the liquidity backlog has grown.
- She urged retail investors to focus on liquidity needs because interval funds, tender offer funds, and drawdown funds can be far less liquid than they seem.
Notable quotes
“you have to follow the money in this space and in private markets, most voices sit on the sales side, right”
“My personal opinion is that they are a canary. They're a tell, right? There's something”
“I think from my point of view as an investor, it's really difficult to say whether it's going on or not, but seeing all the other kind of surrounding factors around it”
“the one thing that is worth tracking”
How the episode opens
Please stay tuned for important disclosure information at the conclusion of this episode. Hi and welcome to the long view. I'm Amy Arnot, portfolio strategist for Morning Star. — And I'm Jeff Pac, managing director for Morning Star Research Services.
Our guest on the podcast today is Ila Kunumoto. Ila is the founder and editor of Accredited Investor Insights, a newsletter that helps investors navigate private markets. She writes about private equity, private credit, and real estate, focusing on the practical realities of evaluating alternative investments from the limited partner perspective.
Leila began investing in public markets in 2001 and expanded into private markets in 2020 with current holdings spanning public equities, real estate, and alternatives. She started her career in finance and management consulting after graduating from the University of Washington. She also worked in advisory services at a big four accounting firm.
Ila, welcome to the long view.
Thank you for having me. — Well, it's great to have you here. We wanted to start out by talking a bit about your background. Um, you've been investing in single family housing since back in 2006 and manage a small real estate portfolio in the Seattle area. How did you first get interested in real estate investing?
Yeah. So, the timing of course was good on our end. Um, I first got introduced to this because after reading the Rich Dad Poor Dad, which probably defined my generation of investors at the time, uh, we did fairly well with single family homes.
It was my husband and I who started kind of assimilating a portfolio and time wise it worked in our favor. And I I've always liked real estate because it's a little bit less of an efficient market. There are some pockets of imbalance and back in you know especially after the great financial crisis there was an opportunity to take advantage of those imbalances there was very clear value and I sort of jumped on it.
From the episode’s captions: roughly the first two minutes, lightly cleaned. Keep watching on YouTube →
Topics
- private markets liquidity
- performance measurement
- disclosure issues
- private credit
- private equity
Companies and tickers mentioned
- MORN
- Morningstar
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Summary, takeaways and quote selection by Octagon. Quotes are short excerpts; the full conversation is in the episode.
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The Long View, this episode and its artwork belong to Morningstar, Christine Benz - Director of Personal Finance and Retirement Planning, Ben Johnson - Head of Client Solutions, Amy Arnott - Portfolio Strategist. Octagon is not affiliated with the show; this page is an independent summary.
