Private Equity

Does Leverage Have a Positive or Negative Effect on Private Equity Real Estate Investments?

Dec 14th, 2014 | Filed under: Private Equity, Real Estate, Today's Post

Guest columnist Brad Case, Ph.D., CFA, CAIA, explores the effects of leverage on private equity real estate investments.


Business Development Companies: The Basics

Nov 20th, 2014 | Filed under: Liquid Alts, Private Equity, Today's Post

Guest columnist Andrew Smith, CAIA, traces the history of Business Development Companies.


The Building of an Infrastructure for Renewables: A Report

Nov 5th, 2014 | Filed under: Alternative energy, Alternative energy investing, Commodities, Infrastructure, Private Equity, Socially responsible investing, Today's Post

In 2012, [as the crude oil price was settling in to $110 and low vol,] the renewables’ infrastructure space for private funds reached an aggregate estimated deal value of $132 billion. In 2013, that fell to $95 billion. It now seems unlikely that 2014 will match last year.


Key Alpha-Oriented Law Firms Merging

Sep 29th, 2014 | Filed under: Alpha Hunters, Private Equity, Today's Post

Yes, law firms that serve alpha hunters are consolidating. But don't take it personally, HF or PE managers. This isn't about you. It's about them. And it isn't necessarily a bad thing.


Complications in Regards to Accessing Private Equity Funds

Sep 1st, 2014 | Filed under: Alpha Strategies, Private Equity, Today's Post

Guest columnist Andrew Smith, CAIA, looks at the complications involved in accessing private equity funds.


Preqin on PE Distributions & Call-Ups in 2013

Aug 18th, 2014 | Filed under: Alpha Hunters, Alpha Strategies, Private Equity, Today's Post, Venture capital

The 2013 performance of the private equity industry, given any of several metrics, was quite strong. Why? In part because the exit environment has been very good.


Deal Activity: Beer and Obamacare Both Factor In

Jul 16th, 2014 | Filed under: Alpha Hunters, Private Equity, Technology, Today's Post

Intralinks’ report suggests that “a handful of fundamental and positive shifts” are at work in the recent uptick in M&A activity. On a behavioral note: corporate confidence is returning, and presumably confident managements are more likely to seek out acquisition targets than are nervous managements.


Questions in Risk: The Different Faces of Private Equity Investing

Jul 2nd, 2014 | Filed under: Private Equity, Risk management, Today's Post

Guest columnist Donna Howe, CFA, looks at the different aspects of private equity and the associated risks.


EDHEC: Investors Who Don’t Want to be Mushrooms Need Benchmarks

Jun 16th, 2014 | Filed under: Asset pricing, Infrastructure, Private Equity, Today's Post

Investors need benchmarks, especially benchmarks of likely infrastructure return, because the long-term illiquid nature of that investment increases information asymmetry between investors and managers, whereas benchmarks keep this asymmetry bearable. So explains Frédéric Blanc-Brude of EDHEC.


Carried Interest Loophole: A Possible Twist in the Old Debate

Jun 10th, 2014 | Filed under: Private Equity, Today's Post, Venture capital

As always, government wants revenue, and by what is now a reflex action heads have turned to the issue of carried interest. Faille speculates that little, if anything, will happen at the federal level, but that we may soon see a shift in the location of the action.


Quantifying Alpha for Private Equity: Four Approaches

Mar 30th, 2014 | Filed under: Alpha Strategies, CAPM / Alpha Theory, Private Equity, Today's Post, Venture capital

I admire a new "direct alpha" approach to measuring the success of PE portfolios. So will anyone who has had to tell a friend or loved one, "just come out and ask me please!"


Former Chesapeake CEO McClendon Stages Comeback

Feb 9th, 2014 | Filed under: Featured Post, oil, Private Equity

Chesapeake Energy Corp.'s former CEO launches new energy fund. Joao Peixe, Oilprice.com, reports.


Commonfund: Looking in a Rear View Mirror for Driving Lessons

Jan 20th, 2014 | Filed under: Alpha Strategies, Private Equity, Today's Post, Venture capital

The crucial generalization to be drawn from the last three decades of alternatives investing by institutions is that generalization is tricky. Even within one type of structure, such as VCs, broad statements have to take account of the wide dispersion in returns, "making manager access and selection key determinants of success."


Clear Correlations Getting Blurry: News From Foundations

Oct 3rd, 2013 | Filed under: Alpha Seekers, Alpha Strategies, Institutional Investing, Private Equity, Today's Post

Comparing the 2011 and 2012 data, some correlations that seemed clear in the former year either disappeared entirely, or become a good deal blurrier, in the 2012 data.


Alternative to an Alternative: Active Microcap Vs. Private Equity Part Two

Sep 26th, 2013 | Filed under: Alpha Seekers, Alpha Strategies, Private Equity, Today's Post

In part two of two, Perritt Capital Management looks at active microcap as an alternative to private equity. Part one published Sept. 25 on AllAboutAlpha.com


Alternative to an Alternative: Active Microcap Vs. Private Equity Part One

Sep 25th, 2013 | Filed under: Alpha Seekers, Private Equity, Today's Post

In part one of two, Perritt Capital Management looks at active microcap as an alternative to private equity.


The Mellowing of Debate over Private Equity

Sep 18th, 2013 | Filed under: Alpha Strategies, Book review, Private Equity, Today's Post

In early 2011, Jason Kelly, a Bloomberg News reporter, decided that he had to write this book to explain to the general public how PE works. That sort of epiphany makes it a little surprising that there isn't more of an over-arching theme in the book that resulted.


SEI: How PE Firms Can Draw Out That Dry Powder

Sep 12th, 2013 | Filed under: Institutional Investing, Private Equity, Today's Post

All that dry powder on the sidelines means good news and bad for PE GPs: first, that there is room for a lot of new demand for their services (the good news); second, that investors remain hesitant – they have deliberately kept that powder in the horn and many will likely continue to do so (the bad news).


A Model for PE Managers and Their Scholars

Aug 28th, 2013 | Filed under: Academic Research, Behavioral finance, Private Equity, Today's Post

Two scholars have published a new model of private equity funds, looking for the real drivers of abnormal returns by process of elimination.


After the Bottom Fell Out of Copper: A Private Equity Story

Aug 21st, 2013 | Filed under: Commodities, Institutional Investing, Private Equity, Today's Post

An opinion by Chief Judge Lynch, of the 1st Circuit Court of Appeals, should have private equity managers in that Circuit reviewing their portfolios, and thinking in a more expansive way about their potential ERISA liabilities for companies they control.


Chemical Industry M&A Experiments Fizzle

Aug 11th, 2013 | Filed under: Alpha Strategies, Private Equity, Today's Post

Companies in the chemicals industry end up in play as mergers-and-acquisitions targets when they have trouble getting financing any other way. If QE policy makes financing too easy, it has the counter-intuitive effect of freezing this particular M&A market.


AIFMD & Private Equity Managers An implementation checklist

Aug 1st, 2013 | Filed under: Private Equity, Regulatory, Today's Post

Guest columnist Shane Brett looks at AIFMD compliance for private equity managers.


The Morgans Hotel Group Fight: Part Two

Jul 14th, 2013 | Filed under: Private Equity, Today's Post, Venture capital

Yucaipa has filed a federal lawsuit that accuses OTK of deceiving the shareholders of Morgans Hotel by misrepresenting the recommendations of two shareholder advisory services. As a legal argument this is ... surprising.


The Morgans Hotel Group Fight: Part One

Jul 11th, 2013 | Filed under: Private Equity, Today's Post, Venture capital

The holding in Kalisman v. Friedman says that there are limits to what the majority of the board can do to keep its dissident isolated and in the dark. That is the right way to grow mushrooms, not the right way to treat a fellow director.


Preqin on Global Alternative Assets and Learning Curves

Jun 4th, 2013 | Filed under: Hedge Fund Industry Trends, Private Equity, Today's Post

The pattern with respect to allocations by institutional investors to hedge funds since 2009 is somewhat different from that of allocations to private equity. As Preqin’s report explains, many institutions have long been familiar with hedge funds, their learning curve has flattened out so to speak, and they have established a target allocation for hedge funds considered as an asset class.


Part III: The Future of Venture Capital: A New Path to Growth

May 28th, 2013 | Filed under: Alpha Seekers, Alpha Strategies, Private Equity, Today's Post, Venture capital

Guest columnist John Bhakdi looks at the future of venture capital in this final segment of a three-part series.


Part II: Structured Seed Capital: Capturing Technology Start-ups In Optimized Clusters

May 27th, 2013 | Filed under: Alpha Strategies, Private Equity, Today's Post, Venture capital

Guest columnist John Bhakdi looks at structured seed capital


Ernst & Young Recall Jamesian Philosophy

Apr 29th, 2013 | Filed under: Private Equity, Today's Post

Recent and ongoing transformations in the PE industry and its institutional contexts have created a demand for a more robust infrastructure: mid or back-office functions are the weight-bearing beams of PE firms.


Study: Diversification is Good for Your PE Allocation Too

Apr 14th, 2013 | Filed under: Private Equity, Today's Post

A new paper in the Journal of Investment Management claims that five sophisticated high-profile institutions could have made better use of the PE portion of their portfolios over the period 1999 to 2010 had they applied the insights of the founder of modern portfolio theory, Harry Markowitz.


Private Equity: Problems and Disconnects

Feb 21st, 2013 | Filed under: Private Equity, Today's Post

If PE managers want to raise money in the present environment, they have to be very clear with their potential investors about how their strategy will work, and they have to pay attention to what those investors are trying to tell them. Further, it might help if neither side in that equation pays too much attention to consultants.


On Not Using the Phrase ‘New Normal’ Here

Sep 26th, 2012 | Filed under: Asset allocation, Institutional Investing, Private Equity, Real Estate, Today's Post, Venture capital

Acceptance of the higher levels of volatility as a fact of life means that careful ongoing attention to risk has become the means of operations. In the United States specifically, 31 percent of institutions say that they monitor their risk budget daily to keep the overall amount of risk in the portfolio under check: more than half (53 percent) say that they do such monitoring on a weekly or monthly basis.


Jean-Paul Sartre Comments on New Asian PE Boom

Sep 10th, 2012 | Filed under: Private Equity, Today's Post

There is good news to report about the renewal of PE activity in the Asia-Pacific region in 2011, and the new McKinsey paper reports it. One potential worrying sign, though, is that in some areas, notably Southeast Asia and India, businesses aren't exiting the PE market for the public world. Indeed, Southeast Asia recorded no initial public offerings at all in 2011.


Kauffman Hits VC Returns, LP Dupes, and J Curve Mythology

Aug 29th, 2012 | Filed under: Alpha Strategies, Institutional Investing, Private Equity, Today's Post, Venture capital

In a study of its own portfolio the Kauffman Foundation found that only twenty of 100 venture funds “beat a public-market equivalent by more than 3 percent annually”.


McKinsey: Allocations Will Rise Despite Sticky Fees

Jul 31st, 2012 | Filed under: Alpha Strategies, Asset allocation, Private Equity, Real Estate, Today's Post

The reason for the increased interest in alternatives, McKinsey says, isn’t that the alternatives’ managers are slashing the price of their services. It is, rather, a discontent with the return to be gained from traditional investment. “Even with downward pressure likely over the next few years, revenue yields for institutional alternative products should remain well above the 35 bps average earned on today’s traditional institutional products.”


More than $3 Trillion AUM for Top 100 Alternative Investment Managers

Jul 25th, 2012 | Filed under: Alpha Strategies, Hedge Fund Industry Trends, Hedge Fund Strategies, Infrastructure, Institutional Investing, Private Equity, Real Estate, Today's Post

The survey also asked that the asset managers state where their total assets are invested, using four geographical categories: Europe; Central/North America; Asia Pacific; Other. Commodity funds were easily the most heavily invested in C/NA, to the extent of 94 percent of their portfolios. Private equity funds are 61 percent invested in C/NA, and PE FoFs also have the majority of their portfolios there, at 54 percent.


Dear SEC: Comments on the JOBS Act

Jul 19th, 2012 | Filed under: Hedge Fund Industry Trends, Hedge Fund Regulation, Private Equity, Real Estate, Regulatory, Today's Post

A veteran of hedge funds and private equity, Jeff Joseph offers some comments to the U.S. Securities and Exchange Commission on the JOBS Act and what this legislation has the potential to mean to the global alternative investment community.


Venture capital is not dead, but bad venture should be

Jun 29th, 2012 | Filed under: Editorial, Private Equity, Venture capital

A recent Kauffman Foundation Study draws daunting conclusions regarding their 20 year experience in the venture capital sector. AARM Founder, Gitanjali Swamy, believes Good Venture exists and shares a road map to help investors find attractive pockets of investment opportunities in venture. What do you think about the future of venture capital in the United States?


Alpha Hunters: The Mobile Payments Opportunity

Jun 13th, 2012 | Filed under: Alpha Hunters, Alpha Strategies, Private Equity, Today's Post, Venture capital

AllAboutAlpha talks to Jalak Jobanputra, MD at RTP Ventures on the mobile payments market, which is set transact over US$1 trillion by 2016.


Alpha Hunters: Looking at Alternative Investments From the Inside Out

Jun 7th, 2012 | Filed under: Alpha Hunters, Alpha Strategies, CTA, Derivatives, Forex, Hedge Fund Industry Trends, Hedge Fund Strategies, Institutional Investing, Private Equity, Real Estate, Today's Post, Venture capital

A deeper look at alternatives with Dr. Bob Swarup, a world-renowned expert and commentator on alternatives and financial markets as well as being a visiting fellow at London School of Economics.


When Pension Plans Come to the PE Table

May 30th, 2012 | Filed under: Institutional Investing, Private Equity, Today's Post

Industry watchers are watching the tug of war between private equity GPs and LPs. Surprisingly, LPs don't want to dictate terms, if Canada offers any evidence. They want equality. And all the rest: a decent track record, a stable team and a successful strategy.


How Institutional Investors Can Make Money in Private Equity

Apr 10th, 2012 | Filed under: Alpha Strategies, Institutional Investing, Private Equity, Today's Post

It looks like the pension funds are worse off than if they had stuck to vanilla bonds and stocks, not least because of the management fees they pay to alternative investment managers.


U.S. Rejoins the Globe, Say Consultants

Mar 28th, 2012 | Filed under: Alpha Strategies, CTA, Hedge Fund Industry Trends, Institutional Investing, Private Equity, Real Estate, Timely Research, Today's Post

Consultants expect that managers' need to generate steady income in a low interest rate environment will drive a lot of portfolio turnover in 2012, inclusive of the movement of alternatives into core positions within portfolios, and it will drive one-time U.S. focused investors and managers to look abroad. Meanwhile, pensions are retreating toward passive mandates.


Catastrophism Versus Darwinism: Dodd-Frank as Climate Change

Mar 14th, 2012 | Filed under: Alpha Strategies, Commodities, CTA, Hedge Fund Industry Trends, Hedge Fund Regulation, Hedge Fund Strategies, Private Equity, Retail Investing, Today's Post

The Grant Thornton paper maintains that the asset management industry achieved "performance and operational efficiencies" during 2011, and this sounds like the sort of marginal adaptation that play a large part in Charles Darwins' writings, to which GT's Winstoin Wilson alluded. But ... the report also treats the regulatory environment as a meteor, capable of wiping out even the best-adapted of pre-collision dinosaurs. So "the Darwinian process" is an odd label for what it describes.


American Healthcare: Under All the Noise, Psilos Finds Cost-Effective Solutions

Feb 22nd, 2012 | Filed under: Private Equity, Today's Post

Lisa Suennen of Psilos Group discusses the new wave in healthcare venture capital: improved care quality while reducing costs.


Private Equity: Sometimes you get what you need…

Feb 8th, 2012 | Filed under: Alpha Strategies, Private Equity, Today's Post

2011 was the year private equity managers learned to accept that what they got even if it wasn't always quite what they wanted. Investors talk about what they want and need in 2012.


European PE Study: The Locusts May Not Be So Bad

Jan 25th, 2012 | Filed under: Alpha Strategies, Private Equity, Today's Post

Two scholars affiliated with the Center for European Economic Research, drawing upon European data between 2000 and 2008, maintain that PE backed companies do not suffer from higher bankruptcy rates than their control group of comparable companies. Their paper also addresses the relationship between bankruptcy risk on the one hand and the syndicated (or, conversely, the stand-alone) nature of a PE deal. It finds no significant relationship.


The Middle Markets in 2012: Oh, to Be Investment Grade, Cash Rich, and In Love!

Jan 19th, 2012 | Filed under: Alpha Strategies, Private Equity, Today's Post

In spite of what the media might have us believe, it isn't quite the end of the world as we know it, particularly as it applies to European private equity.


Morgan Stanley PE Roundtable on Numbers, Culture, and Globalization

Jan 10th, 2012 | Filed under: Private Equity, Today's Post

A recent study, in which Steve Kaplan of the University of Chicago collaborated with Bob Harris of the University of Virginia and Tim Jenkinson of Oxford, addressed fund-level performance using data from Burgiss Group. Kaplan said this study indicates that “private equity has performed remarkably well.” In the period 1990 to 2008, a dollar in PE returned to investors 300 to 400 basis points a year more than a dollar in the equities of the S&P 500, net of all fees. This, if accepted, still leaves the question of the relationship of PE funds/firms to one another. Are they all the same?


‘Top Quartile’ GPs – So How Is Top Quartile Private Equity Performance Determined?

Jan 9th, 2012 | Filed under: Private Equity, Today's Post

If every fund is number one, then no one is number one. Irina Zeltser examines performance rankings in private equity.