Steve Schwarzman, chief executive of Blackstone Group, got cocky on the firm’s Oct. 27 third-quarter-earnings call. He was explaining that institutions hungry for yield in the low-return environment are turning to alternatives to get the kind of returns they need to meet their obligations. What Schwarzman is describing relates to an increasingly desperate situation especially […]
For the fourth year running an analysis of return data sourced from public-pension funds shows that past performance in private equity has something to say about future performance. All other things being equal, investors are better off backing firms whose most recent funds were top quartile for their vintage years and avoiding those whose most recent […]
Tech appears to be single-handedly dragging along private equity M&A activity this year, keeping it at least on par with last year’s volume levels. In our quarterly issue, Steve Gelsi reports that of the 10 largest third-quarter PE deals, seven were in technology, media and telecom. Tech businesses are drawing lofty valuations, 5x to 10x […]
All the debating and lobbying and sweating about whether one day buyout professionals will have to pay regular income taxes, not capital gains, on their profit share sometimes obscures two human-resources-related truths. One, firms have been hiring at a fast clip. And two, already-generous compensation packages have been racing skyward across the industry. Ample evidence for these developments […]
I don’t often find myself in agreement with Donald Trump. However, Trump said something during his first debate with Hillary Clinton (who I also don’t generally agree with), that hit home. Trump blamed the Federal Reserve for creating a bubble by keeping interest rates low. He claimed the Fed was doing the bidding of the […]
In light of the many infractions the SEC has discovered while scrutinizing the private equity industry, why would a lawmaker think it’s a good idea for GPs to throw away fundraising due-diligence communications between GPs and LPs? I’m referring to HR 5424, the Investment Advisers Modernization Act of 2016, sponsored by Rep. Robert Hurt (R.-Virginia). […]
Reuters seemed to discover this week that the SEC has been looking into how GPs allocate co-investment activity and how that gets disclosed to limited partners. Reuters couched it as certain big investors like GIC getting secret co-investment deals with GPs behind smaller LPs’ backs. Which is an interesting way to present the story, but it doesn’t explain that […]
Pension giant Massachusetts PRIM has outdistanced many of its peers in the race to achieve top-quartile private equity returns. Are the superior results just a fluke? A working paper issued last month by the National Bureau of Economic Research suggests that its outperformance stems from skill and not just chance. The four authors compared the returns achieved by investors with those that would have resulted had they picked funds […]
Madison Capital’s recent push into technology lending is bearing fruit. The Chicago mid-market lender, which in the first quarter formalized and beefed up what had been an ad hoc approach to technology, has racked up six tech platform deals so far this year, with two more expected to close by the end of October and as many as four more […]
What is the path to exit for firms that buy minority stakes in GP management companies? Industry sources are asking the question, and it doesn’t seem to have a great answer. The obvious exit is the public markets. The investors get paid when the firm goes public. But realistically, how many PE firms are going […]