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Private Equity Council Strikes Back

Quite predictably, PE industry was not agreeable to the report written by The Centre for the Study of Financial Innovation I mentioned in my post yesterday (see: IRR is not a perfect measure of PE investment returns. So what?).

The article referenced below describes the response by Private Equity Council. Turns out, the report was actually referring to comparing the performance of public and private equity. I have some experience of making similar comparisons, and must admit they are a very tricky business. This is not an apples-to-apples comparison. This is not even apples-to-oranges, it's more like apples-to-apple-jam comparison. Technically, you can run the numbers, and they may or may not be in favor of private equity, but investment in private securities is not only about the level of return. It is also about know-how transfer, liabilities duration match and many other things. Unfortunately, I did not have the chance to read to full report, but my impression is that Mr. Peter Morris from The Centre for the Study of Financial Innovation does not fully appreciate these differences.

Link to the artlice:
Private equity rejects criticism by think-tank

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