Coming to terms with private equity returns

Evidence of the power of alpha in private equity is compelling. Oliver Gottschalg, a professor at the École des Hautes Études Commerciales (HEC) in Paris, demonstrates the alpha effect by comparing actual private equity returns to stock market returns of similar investments in company shares. In his most recent research with Golding Capital Partners, Gottschalg estimates that return margin to be worth an additional 5 percentage points. The PE alpha effect has been exceptionally strong in times of economic turbulence. By Gottschalg's calculation, PE returns generated through alpha added 18 percentage points to PE performance during periods of economic recession.


http://www.ameinfo.com/coming-terms-private-equity-returns-304624