[Week 36 of 2025] Fertility, Funds, and Fortuity

Welcome back to Price and Prejudice with a few musings from Week 36 of 2025.

The Fertility Mismatch

Claudia Goldin, a Nobel Prize winner who has extensively studied the history of women in the U.S. labor force, has a new paper studying why fertility has been falling everywhere for decades. The core idea in the model is simple: modern women want kids and careers, but they need “dependable dads” to make that feasible. If men can’t credibly commit to sharing the load, women delay or skip childbearing.

The key insight is that what looks like individual choice often reflects structural mismatches. Women may appear to be “choosing” smaller families, but the real driver is a lack of credible commitments from partners or institutions. That logic extends naturally to other matching markets closer to finance: investors and borrowers, firms and workers, even governments and creditors. Each side claims to want more—capital, labor, kids—but if the match fails on trust and incentives, the equilibrium quantity falls short. In that sense, declining fertility is just another example of markets under-producing when coordination is hard and commitment is weak.

When Cash Isn't Cash

An "in-kind" transaction means that instead of giving you money, I’ll give you stuff. In the ETF world, it’s famous because authorized participants don’t usually hand over cash to create shares—they deliver a basket of stocks, and in return, they get ETF units. Same thing on the way out. This structure is useful because it minimizes taxable events and avoids the drag of trading costs and is often cited as one of the main reasons why ETFs can be so efficient compared to mutual funds.

Part of the reason in-kind works so well for ETFs is that the baskets are generally liquid—you can hand over S&P 500 stocks and everyone knows what they’re worth. But when the assets are illiquid, the story flips. As this article points out, in private equity an in-kind distribution usually means the GP couldn’t sell, so instead you get the securities themselves, along with vague promises of “commercially reasonable efforts.” The piece lays out the tension: LPs want cash, clear rules, and the ability to opt out; GPs want discretion and cover. In-kind is elegant when the basket is liquid, and an awkward game of hot potato when it’s not.

Podcasts This Week

The Value Investing with Legends podcast (hosted at Columbia Business School) recently profiled two familiar archetypes. Kent Daniel went from academia to Wall Street and back again, while Cliff Asness made the jump in the other direction and stayed put. Both stories are less about grand plans than about accidents: the right paper at the right time, the right colleague down the hall, the market crash that nudged a career choice. It also makes clear that academic finance doesn’t so much “explain” markets as give practitioners a toolkit for navigating them.