Jul 15 2024 31 mins 2
Supporters of the $10trn private equity industry say it fuels economic growth and delivers leaner, better-performing companies.
One leading critic of the sector is Ludovic Phalippou, who says that the industry routinely overstates its financial performance. And, he says, private equity funds charge a whopping 6-7% a year in fees, wiping out any potential benefits to investors.
In the latest New Money Review podcast, I interview Phalippou, who is professor of financial economics at Oxford University. We cover:
- What is private equity?
- How big is the private equity market?
- Why have private equity assets grown fivefold in a decade?
- What is the economic footprint of private equity?
- How should we measure private equity funds’ performance?
- How honest are private equity firms in reporting performance?
- Do private equity funds have higher returns than public equity funds?
- What do private equity funds cost?
- Agency conflicts in the private equity industry
- The impact of recent interest rate rises on private equity
- The need for standardised reporting of private equity performance.
