CAZ Investments Review: Key Facts About the “Holy Grail” Fund

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• I first learned about CAZ Investments due to Tony Robbins’ promotion of the firm in his new book The Holy Grail of Investing.

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I first learned about CAZ Investments due to Tony Robbins’ promotion of the firm in his new book The Holy Grail of Investing. CAZ founder Christopher Zook co-wrote the book and advocates investing in alternative asset classes through CAZ’s offerings.

Curious to learn more, I took a deep dive into the firm’s investment strategies, fee structure, risks, and other considerations that potential investors should be aware of.

Table of Contents

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• 11 Things to Know About CAZ Investments
• About CAZ Investments
• CAZ Performance and Private Market History
• What Fees Can You Expect to Pay With CAZ Investments?
• What Assets Does CAZ Invest In?
• My First Impressions of CAZ Investments

11 Things to Know About CAZ Investments

Here are key facts to know about the firm based on my review of the CAZ SEC disclosure brochure, as well as the filings around the CAZ Strategic Opportunities Fund (such as the prospectus):  

1. CAZ Investments offers investment advisory services to accredited investors and institutions through separately managed accounts and private funds. As of December 2023, they manage over $6 billion in assets.
2. Accredited investors can access the CAZ Strategic Opportunities Fund. Qualified purchasers (i.e., those with more than $5 million in investments) can access additional funds and services. 
3. You can invest in a taxable fund, or purchase through an IRA or 401(k) rollover.
4. The CAZ Strategic Opportunities Fund aims to give investors access to various private investments in an all-in-one vehicle that includes 8 to 15 different uncorrelated asset types. It’s also the fund that’s promoted throughout the book.
5. The CAZ Strategic Opportunities Fund is a new offering and doesn’t have a performance history. 
6. The minimum investment required to access CAZ’s Strategic Opportunities Fund is $25,000. 
7. Fees vary depending on share class, and can change going forward based on how much the fund raises. 
8. For investments under $99,999, the public offering cost involves a 3% upfront sales charge.
9. The management fee is flat at 1.25%, with no performance fee. However, other associated fees increase the annual costs from 2.7% to 3.6%, depending on the share class. The more you invest, the lower your expected costs. 
10. Investors can sell up to 100% of their shares to the fund on a quarterly basis. But the fund limits how much they’ll purchase back to just 5% of its total assets each quarter, meaning you could face liquidity issues. Additionally, there’s a 2% fee for selling back shares within the first year.
11. The fund will distribute capital gains and investment income at least annually.

About CAZ Investments

CAZ Investments is an SEC-registered investment adviser founded in 2001 by Christopher Zook. The firm has traditionally provided ultra-high-net-worth investors and institutions with access to private market offerings like private equity, credit and real estate, with investment minimums over $250,000. 

However, CAZ recently launched a more accessible fund, called the CAZ Strategic Opportunities Fund, which has a much lower minimum investment of just $25,000.

CAZ Performance and Private Market History

Evaluating the historical performance of CAZ Investments is difficult, given their suite of more than 80 private market funds, which are tailored to the needs of ultra-high-net-worth individuals and institutions. 

In other words, there’s no clear rate of return since the fund’s inception, such as you’d find with publicly traded mutual funds. 

If you’re thinking about investing with CAZ, you can find their quarterly letters on their website. Although they do not mention how individual funds performed against their benchmarks, the letters provide a trove of information pertaining to the firm’s perspective on the current economic situation.

Furthermore, unlike publicly traded funds with readily observable cost histories, private investments rely on internal and periodic third-party valuations of the underlying illiquid assets. Since this subjective process occurs infrequently, exact historical returns get recorded with a lag.

CAZ’s website refers to how private equity investment has performed overall as a sector, relying on research by Cambridge Associates (a well-respected market research firm in the space). 

For additional context, here’s a relevant quote from a New York Times article titled “Is Private Equity Overrated”:

“As of September 2020, private equity funds had produced a 14.2 percent median annualized return, net of fees, over the previous 10 years, compared with 13.7 percent for the S&P 500, according to an analysis of indexes by the American Investment Council, a lobbying group for the industry, using the latest numbers offered. Public pension funds invested in private equity actually had worse returns than from the S&P 500 , 12.8 percent, net of fees. (These returns, and others quoted in this article, do not include venture capital, which is typically viewed as a separate asset class.)”

Further, a paper published by Ludovic Phalippou of the University of Oxford’s Said Business School found that private equity returns have equaled the returns of public equities since 2006. At the same time, general partners have retained far higher compensation, revealing questionable value relative to liquid index funds when risk-adjusting outcomes.

While we’ll touch on this more below, it’s fair to say that while retail investors can benefit from the increased diversification of private markets, there’s no guarantee private equity investments will outperform a basic equity index fund approach, which is frequently the benchmark in the space (although private equity typically involves greater investment and liquidity risk). 

What Fees Can You Expect to Pay With CAZ Investments?

The CAZ Strategic Opportunities Fund offers multiple share classes based on individual investor eligibility and minimum investment size. Each share class has its own upfront sales charges and ongoing expense ratios, as noted in the table below:

Share ClassMinimum InvestmentUpfront Sales ChargeAverage Annual FeesClass A$25,000Up to 3%3.6%Class D$25,000None3.6%Class F$100,000None2.7%Class I$500,000None3.0%Class R$25,000None3.25%

Class A shares are accessible to accredited investors with a $25,000 investment. These shares have up to 3% in front-end sales charges, with that amount decreasing incrementally for investments above $100,000. Ongoing fees average around 3.6%, including a 1.25% management fee.

Class D shares also require a $25,000 minimum initial investment but have no upfront sales fees. Total annual operating expenses run approximately 3.6%, consisting

Final Thoughts

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Originally published at thewaystowealth.com.