Investing Insights 2 Cautionary Tales from Private Equity and Private Credit Markets
Mar 13, 2026
Alec Davis, Morningstar PitchBook writer covering public-private market convergence. Jeff Patak, Morningstar managing director specializing in manager research and ETFs. They unpack XOVR’s risky private-holdings approach and SpaceX concentration swings. They also dig into Blue Owl’s halted redemptions, liquidity choices, and fallout for alternative asset managers.
AI Snips
Chapters
Transcript
Episode notes
How XOVR's Fixed SpaceX Stake Distorted Weighting
- XOVR is a stock ETF that carved out a private-equity sleeve, holding a fixed-dollar SpaceX position that became a major differentiator.
- The SpaceX stake stayed ~$34M, then rose to ~$162M while ETF flows caused its portfolio weight to swing widely.
Flows Turned A Small Private Position Into An SEC Problem
- Massive inflows and outflows amplified the private stake's percentage, briefly pushing SpaceX to ~45% of XOVR's assets.
- SEC rules cap illiquid ETF holdings at 15%, forcing the fund to notify and submit monthly remediation plans once exceeded.
Carefully Vet Public Private Crossover ETFs
- Sweat the details before buying crossover ETFs and ask how managers value and manage illiquid positions.
- Understand how the private sleeve is sized, valued, and how illiquidity risk could affect NAV and arbitrage.