{"id":177762,"date":"2019-06-18T18:37:00","date_gmt":"2019-06-18T23:37:00","guid":{"rendered":"https:\/\/www.panix.com\/~msaroff\/40years\/2019\/06\/18\/even-the-wall-street-journal-noticed\/"},"modified":"2019-06-18T18:37:00","modified_gmt":"2019-06-18T23:37:00","slug":"even-the-wall-street-journal-noticed","status":"publish","type":"post","link":"https:\/\/www.panix.com\/~msaroff\/40years\/2019\/06\/18\/even-the-wall-street-journal-noticed\/","title":{"rendered":"Even the Wall Street Journal Noticed"},"content":{"rendered":"<div>They have noticed that <a href=\"https:\/\/www.wsj.com\/articles\/private-equity-firms-are-raising-bigger-and-bigger-funds-they-often-dont-deliver-11560859200\">private equity does not have the performance to justify its stratospheric fees<\/a>:<\/div>\n<p><\/p>\n<blockquote><p><span style=\"color: blue;\"><br \/>\u2026\u2026\u2026<\/p>\n<p>The rise of megafunds reflects the growing demand for private equity from large investors such as sovereign-wealth funds with hundreds of millions of dollars to put to work. With interest rates still persistently low, the industry\u2019s historical reputation for 20%-plus returns, is appealing\u2014even if it means paying higher fees and having money locked up for long periods. <\/p>\n<p>The problem is that the largest funds haven\u2019t always lived up to the hype. Taken together, private-equity funds of $10 billion or more posted 14.4% five-year annualized returns net of fees as of the end of last September, barely edging past the 14.1% return for the S&amp;P 500, according to data from investment firm Cambridge Associates. <\/p>\n<p>Buyout funds\u2019 relative performance doesn\u2019t improve much over a longer time frame. Over a span of 12.75 years\u2014the longest period for which Cambridge has sufficient data on megafunds\u2014returns for these large funds was 10.2%, the same as the broader index, its data show.<\/span><\/p><\/blockquote>\n<p>This is why I stick to things like index funds.<\/p>\n<p>Over any significant time frame, the geniuses on Wall Street do not out-perform the market.<\/p>\n","protected":false},"excerpt":{"rendered":"<p>They have noticed that private equity does not have the performance to justify its stratospheric fees: \u2026\u2026\u2026 The rise of megafunds reflects the growing demand for private equity from large investors such as sovereign-wealth funds with hundreds of millions of dollars to put to work. With interest rates still persistently low, the industry\u2019s historical reputation &hellip;<\/p>\n","protected":false},"author":1,"featured_media":0,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[],"tags":[365,588,456],"class_list":["post-177762","post","type-post","status-publish","format-standard","hentry","tag-business","tag-fail","tag-finance"],"_links":{"self":[{"href":"https:\/\/www.panix.com\/~msaroff\/40years\/wp-json\/wp\/v2\/posts\/177762"}],"collection":[{"href":"https:\/\/www.panix.com\/~msaroff\/40years\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.panix.com\/~msaroff\/40years\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.panix.com\/~msaroff\/40years\/wp-json\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"https:\/\/www.panix.com\/~msaroff\/40years\/wp-json\/wp\/v2\/comments?post=177762"}],"version-history":[{"count":0,"href":"https:\/\/www.panix.com\/~msaroff\/40years\/wp-json\/wp\/v2\/posts\/177762\/revisions"}],"wp:attachment":[{"href":"https:\/\/www.panix.com\/~msaroff\/40years\/wp-json\/wp\/v2\/media?parent=177762"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.panix.com\/~msaroff\/40years\/wp-json\/wp\/v2\/categories?post=177762"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.panix.com\/~msaroff\/40years\/wp-json\/wp\/v2\/tags?post=177762"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}