Is Private Equity overrated?

[Tomconroy]

Interesting article on private equity funds in the NYT Dealbook newsletter today (I don't know if it's paywalled). They are difficult to value until they are liquidated after ten years. The internal rate of return is easily manipulated. Are they better investments than stock index funds? Maybe not now, if they ever were.





Is Private Equity Overrated? https://nyti.ms/3djYiFR

[ShazamIam]

1. Good post, private equity could come under more scrutinty and regulation.

[IbogaProject]

2. Private equity is mostly rule bending

Private equity is mostly rule bending.

First the managers get to keep a cut monthly and perpetually roll it over tax free. Only their withdrawals are tax events.

Second they are free of most legal limits on investment company's.

Third is the only one good for the investor is all returns get turned into long-term capital gains, even short lived speculative moves.

That money needs to be fully at risk so not for humble peons, who might miss if it there are losses.