Nobody Knows Anything

Thomas Meyer
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Thomas Meyer: LDS Partners

Chapter Chapter 12 in Private Equity Unchained, 2014, pp 123-132 from Palgrave Macmillan

Abstract: Abstract When investing in private equity funds, LPs typically aim to beat a target return, for example, set by a public equity index, or, importantly for funds-of-funds, outperform other LPs. The best 25 per cent of a vintage year’s fund population have been shown to outperform most other types of assets. On the other hand, various reviews of research studies suggest that the private equity funds’ average risk-adjusted returns have not been nearly as attractive as expected.1 For primary investments in funds a pricing mechanism that could adjust for the risks incurred does not exist.2 To compensate for this gap and the lack of risk-adjusted pricing, LPs must have strong selection skills.

Keywords: Institutional Investor; Private Equity; Fund Manager; Asset Class; Private Equity Fund (search for similar items in EconPapers)
Date: 2014
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Persistent link: https://EconPapers.repec.org/RePEc:pal:palchp:978-1-137-28682-6_12

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DOI: 10.1057/9781137286826_12

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