The Best (and Worst) Funds to Start in 2026

In this video, I'm going to break down funds that I would start in 2026, funds that I would avoid, and funds that I'm kind of neutral on for this year. So let's break down the first one, funds that I would start in 2026. Number one is secondary funds. Now secondary funds specific to and in tandem with large private equity funds. Right now the time to IPO is 14 years. There are companies like SpaceX, Canva, OpenAI, Anthropic that have stayed private for an immense amount of time, and public markets cannot access any of these investments. I've seen a number of funds recently get access to shares on the secondary market of employees that are trying to sell shares or using some of their stock options, and firms are aggregating capital to go and buy these shares pre-IPO. I'm very bullish on the IPO outlook for 2026 and 2027. I believe many of these firms that have been private for a decade or more, I believe now are warming up and filing for IPOs this year. And if you can get access on a secondary market to them, I think there's some money to be made from people taking advantage of that opportunity. Now let's go over to funds that I would not look at starting in 2026. Now this— there's a big caveat on this one. I'm going to bucket this as hedge funds. Now don't get mad at me. There are plenty of hedge funds that can do well in 2026, but I think there's some headwinds For the common hedge fund this year. Number 1 is AI. So AI is being used across many hedge funds, maybe even the one you're looking to start, but also at the largest firms on earth. The competitive advantage, I believe, is being taken away because of AI. Now, you could argue maybe it's in your favor. Great, that can happen. But I will dovetail that with number 2. Since the pandemic, many hedge funds, even large institutions, have complained about markets that have swung in different directions because of news cycles. There are many firms that used to have an edge, but now because of something President Trump says or a tweet or something that's going viral in the news, markets are moving drastically because of that. And it's not based on really anything fundamental or technical. It's just news or something that hit the market that jolts the market in certain directions and will blow up firms that have a certain amount of leverage on their firm. In my opinion, hedge funds have a lot of headwinds in this year. Now, can you start one and be successful? For sure, but I just think this year there's a lot more headwinds than there used to be. Final point I'll make on this: price-to-earnings ratios are extremely high when you look back historically. If you're entering the market and you're more of a long investor in hedge funds, this might be a bad entry price to join the public markets. Now, if you're shorting or doing a long-short strategy, again, hedge funds is a broad bucket. You can do a lot there. But at least for me personally, this is one that I would avoid in 2026. Now dovetailing that to more of a neutral one. So I talked about one I would do, one that I would avoid, and one that I'm more neutral on is crypto funds. On that same thread, and I actually actively run a crypto fund right now, prices have dropped significantly for crypto. So right now is a great entry price for crypto. We've broken out a little bit of this for your strategies. Very interesting time for crypto. So some managers I think will do extremely well with crypto, some won't do well, and crypto is just volatile in general. We've seen a lot of people with leverage in crypto get wiped out. Our fund has zero leverage in crypto, so we've done decent through the time period. but that's why I put it as a neutral one. I think some funds will do great and some funds will do horribly. That's why I'd put it as a neutral stance for my category. All right, back over to funds that I would do in 2026. I'm going to bucket this as a broad one, but real estate. Real estate right now is in a very interesting spot. I believe we've had 3 years of pain in real estate. We've had rate hikes, we've had a huge bid-ask spread. Very few transactions have happened because Sellers are just sitting at a high price and buyers want a much lower price. We have a new Fed chair, Kevin Warsh, looking to be confirmed in May as the chairman of the Federal Reserve. And the market is pricing in significant rate cuts in the middle to end of this year, especially with midterms coming up. I believe that with these rate cuts and all the culmination of new investment happening in the United States right now, $9.8 trillion— trillion with a T— is committed to investing into infrastructure in the United States right now, according to the White House. That is a massive amount of stuff that needs to be built from construction in the United States. And the ripple effects of all of those massive data centers, AI plants, construction facilities, you name it, are huge for real estate in certain cities and locations around the country. Now, real estate is local, so every market is different. But as a general sense, I think we've had 3 years of pain in real estate. we could have 3 years of gain in real estate very soon. That's one that I am bullish on for 2026, one that I would look at getting into because prices are at decent points right now. And I think we're gonna have an attractive environment here over the next 18 to 24 months. Now, on the other hand, because we're talking about interest rates, a fund type that I would be hesitant in 2026 is private credit. This is funds issuing loans. The last 3 years, private credit has been extremely hot. We went to the Greenwich Economic Forum about 18 months ago. They had a full day on private credit. All these private credit firms were starting because rates had been hiked so quickly and so fast. Banks were hesitant to lend on things. And so private credit firms had a great opportunity to take advantage of this gap in the market. Well, with rates coming down, I believe private credit's going to have more headwinds than the last 3 years. Now, can you be successful in private credit? For sure. But are there going to be more headwinds? I think yes. Furthermore, a lot of new private credit firms have started the last couple of years, and now competition is going to be much higher with rates coming down. I could see headwinds in that space. Again, you can be successful in any category, but I think more headwinds in the private credit space. Now that brings me to more of a neutral one. I'm going to explain why I'm neutral on this. Early-stage venture capital, I am very bullish on and a little bit bearish on for 2 reasons. So that's why I put them in the middle category. Right now, venture capital is in such a unique spot. Number one, we're at, I think, a good vintage. Vintage in venture capital matters a lot. Venture capital evaluations go in these cycles. We saw a big blow-off top end of 2020, 2021. Evaluations were really high since then. Many firms have marked down their portfolio. I believe we saw a report the other day, on average about 40 to 50% in the last 3 or 4 years. So we've had a lot of gain. That being said, you're probably entering at a decent entry point right now. Now, the reason I'm bullish on early-stage venture capital is because of AI. And I say early-stage venture because many firms can build tech at a much cheaper cost than maybe previous generations of tech builders with coding assistants and other infrastructure built. One dev can have the same result of 5 or 10 devs, you know, a decade ago. And what this means is you could be a seed investor into venture capital firms, and that could be enough money to actually get them through the J-curve. In previous generations, you had to have a seed, a Series A, and a B typically to get through the J-curve where they're actually profitable as a company. Right now, because of AI, that J-curve seemingly is being shortened quite a bit where companies can start and get revenue within 6 or 8 months rather than 3 or 4 years previously. So an early-stage venture capitalist can do decently well. Now, a caveat: you need to have some way, shape, or form of sourcing these deals at early stages. And the obvious one is be able to identify great tech founders And that's a thing that you can determine if you have that. Now, why I'm bearish on venture capital is for the same reasons, is AI. Many of the firms that are being invested into now might be completely displaced by other firms 18 months from now or larger big tech companies in a few years. We're seeing a compression of maybe in tech, what used to be a decade is gonna be compressed down to maybe 3 or 4 years. And so we'll see a lot of churn of companies that are put out of business because of other companies also using AI. So that's why I put them in a neutral spot. I think right now is a decent vintage. Less dollars go much further, which is why I'm bullish. Why I'm bearish is because of the competitive landscape is much greater right now than in previous generations of venture capitalists. So that's why I put them as a net neutral. Now, I say all this with a massive grain of salt. I form these opinions because I have a group called Black Card with hundreds of fund managers right now that are sharing what's going on for their funds currently. And so I derived this from them. And I also run 2 funds that give me some data on how this looks. One of those funds is the GP Stakes Fund, where we review hundreds of fund managers and look to invest into them. Now, if you disagree with me, comment down below, share your picks. Where would you have put things? I'm curious to see what you'll say. Like and subscribe this video. It should push this out to more people so we can share this knowledge with others. With that, I'll see you in the next video. Bye-bye.