Ten years on: did the “fair value” rule change the face of private equity?
This paper investigates whether the introduction of “fair value” rule affected the volatility of valuations in the private markets. We …
In three decades, private equity has developed from a cottage industry managing an estimated hundred billion of dollars to a fullyfledged asset class with close to three trillion of assets under management. This fast growth has been relatively immune to macroeconomic booms and busts, but it is unclear how long this rapid development can continue.
Fund managers compete with each other to raise capital regularly. If the pace of capital inflows in private equity abates or stabilises, this competition will increase. Fund managers will have to work harder to attract capital. This would also reduce some of the pressure on pricing, potentially leading to better longterm returns.
Fund investors track capital inflows to deploy their own capital effectively. Although sophisticated investors avoid market timing, they build their asset allocation dynamically. Their task is to deploy capital while avoiding overheated markets. Part of their challenge is
to track capital raised, raised but undeployed (“dry powder”) and capital already deployed.
Jan 22, 2019
Ten years on: did the “fair value” rule change the face of private equity?
This paper investigates whether the introduction of “fair value” rule affected the volatility of valuations in the private markets. We …
Jan 11, 2019
Returns, risks and liquidity of VC Funds in Q3 2018
“Despite a drop in performance from the record high achieved in 2017, returns from venture capital funds globally have remained …
Dec 18, 2018
Interpreting Drawdowns: The Data Lens
Fund investors exercise a certain pressure on fund managers to quickly deploy the capital committed to funds. The rationale is …