Part 1: What Barbarians Like to Take Private
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Mr. Grantham co-founded GMO in 1977 and is a member of GMO’s Asset Allocation team, serving as the firm’s long-term investment strategist. He is the Chairman of the GMO Board of Directors, a partner of the firm, and has also served on the investment boards of several non-profit organizations. Prior to GMO’s founding, Mr. Grantham was co-founder of Batterymarch Financial Management in 1969 where he recommended commercial indexing in 1971, one of several claims to being first. He began his investment career as an economist with Royal Dutch Shell. Mr. Grantham earned his undergraduate degree from the University of Sheffield (U.K.) and an MBA from Harvard Business School. He is a member of the Academy of Arts and Sciences, holds a CBE from the UK and is a recipient of the Carnegie Medal for Philanthropy.
Tom Hancock
Head of Focused Equity, Portfolio Manager
Dr. Hancock is the Head of GMO’s Focused Equity team and a portfolio manager for GMO’s Quality Strategies. Dr. Hancock is a partner of the firm. Previously at GMO, he was Co-Head of the Global Equity team. Prior to joining GMO in 1995, he was a research scientist at Siemens and a software engineer at IBM. Dr. Hancock holds BS and MS degrees from Rensselaer Polytechnic Institute and a PhD in Computer Science from Harvard University.
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Mr. Grantham co-founded GMO in 1977 and is a member of GMO’s Asset Allocation team, serving as the firm’s long-term investment strategist. He is the Chairman of the GMO Board of Directors, a partner of the firm, and has also served on the investment boards of several non-profit organizations. Prior to GMO’s founding, Mr. Grantham was co-founder of Batterymarch Financial Management in 1969 where he recommended commercial indexing in 1971, one of several claims to being first. He began his investment career as an economist with Royal Dutch Shell. Mr. Grantham earned his undergraduate degree from the University of Sheffield (U.K.) and an MBA from Harvard Business School. He is a member of the Academy of Arts and Sciences, holds a CBE from the UK and is a recipient of the Carnegie Medal for Philanthropy.
Tom Hancock
Head of Focused Equity, Portfolio Manager
Dr. Hancock is the Head of GMO’s Focused Equity team and a portfolio manager for GMO’s Quality Strategies. Dr. Hancock is a partner of the firm. Previously at GMO, he was Co-Head of the Global Equity team. Prior to joining GMO in 1995, he was a research scientist at Siemens and a software engineer at IBM. Dr. Hancock holds BS and MS degrees from Rensselaer Polytechnic Institute and a PhD in Computer Science from Harvard University.
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GMO Quarterly Letter | May 21, 2026
What Barbarians Like to Take Private
(Or: The Risks in Your Private Equity Portfolio)
By Ben Inker and John Pease
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Related Investments
Quality Spectrum Strategy
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Asset Allocation Team
Authors
Ben Inker
Co-Head of Asset Allocation, Portfolio Manager
Mr. Inker is Co-Head of GMO’s Asset Allocation team and a portfolio manager for the team’s products. Mr. Inker is a member of the GMO Board of Directors and a partner of the firm. He joined GMO in 1992 following the completion of his bachelor's degree in Economics from Yale University. In his years at GMO, Mr. Inker has served as an analyst for the Quantitative Equity and Asset Allocation teams, as a portfolio manager of several equity and asset allocation portfolios, as Co-Head of International Quantitative Equities, and as CIO of Quantitative Developed Equities. He is a CFA charterholder.
John Pease
Asset Allocation
Mr. Pease is the Head of Asset Allocation Research on GMO’s Asset Allocation team and a partner of the firm. Prior to joining GMO full-time in 2016, Mr. Pease was an intern with the Asset Allocation team. Mr. Pease earned a bachelor’s in Economics and a master’s in Economics from Pontificia Universidade Catolica do Rio de Janeiro.
Listen to Part 1 of the Quarterly Letter
Executive Summary
While most institutional investors recognize that private equity and public equity share similar economic risks, they often seem to ignore how their aggregate equity portfolio is affected by their substantial allocation to private equity. Analyzing 700 private equity leveraged buyouts over the last 45 years allowed us to compare a meaningful proportion of private equity portfolios to their public equity counterparts.
Relative to public equities, private equity skews small and lower quality, and has a massive bet on software—all of which make a portfolio with a significant private equity allocation riskier and less well diversified from an industry- and factor-perspective...