Is Private Equity still outperforming the public markets?
Published on Mar 17, 2016
Professor Tim Jenkinson, a leading authority on the private equity sector, led a discussion on the performance of private equity investments and how they compare to public equity. Is performance favourable? How can you effectively measure it?
0:00thank you very much for joining us on today’s private equity weapon on
0:05Professor Tim Jenkins on the subject today is the public markets will shortly
0:16and the new over 22 times just a quick background to finance faculty Business
0:27School and has been trying to call he is also the director of our own private
0:33equity institute and tim was one of the co-founders of their independent equity
0:41research consortium which has individual such as Robert Harris and Steve Kaplan
0:46asked him colleagues from started but I will hand over to term so thank you very
0:57much for joining us for thanks for joining me try to answer this question
1:20questions they think they’re going to get better returns in other alternatives
1:34in the simplest alternative is your money to work in in public markets and
1:40indeed accurate to describe this on the screen which was in franchise towards
1:46the end of last year in a session that at most this is becoming more call
1:52public markets and it’s interesting because I post a question to two sets of
2:00investors in recent months since that’s what they thought I posted to a large
2:09group of private-equity investors at the peak
2:11a super investor conference in and and they were mainly private equity
2:19investors and Morris everybody agree with this statement in any hands went up
2:25saying they disagree i dont need two days ago I posts a question to answer
2:31topic a masters and everybody disagree so it’s it’s a contentious issue and i
2:39think what I’m gonna do stay is 22 briefly I give you my perspective of
2:44this and I’m gonna talk for about 25 minutes or something like that and then
2:50give you a chance to answer any questions online and I will try to
2:55answer them as much as I can about so that’s the context of today and when it
3:06comes to this question I have some fool the research which was published a
3:13couple of years ago dow private equity performance what we know it was
3:19published in the journal I could have german Finance world and the answer to
3:26that so that you don’t have to go and read this article is that in the case of
3:32USPOW’s funds which we focused on the time we found that they had consistently
3:39outperform public markets by about 3%
3:43we found very dif non-us but capital funds which have done extremely well in
3:49the nineteen nineties but had really under and more recently we’ve updated
3:55some extended it to europe and we found several results what I want to do today
4:03is to some extent to ask question what does what the latest figures actually
4:09show about returns what are the long-term trends look like so we’ll look
4:15back over the last five years
4:17see how the market’s been change and also to look at how the distribution of
4:22Richards changing funds
4:25said that you don’t invest in private equity for the average return you really
4:31invest with the good managers who chew excellent returns and so I’m going to
4:37look and see how much that distributions change and then finally I want to look
4:43at the Capitol I realize it’s sort of a lot of attention recently in terms of
4:50high valuations lots of money flooding in the last decade since 15 years since
4:58the end of the dot-com bubble
5:01it’s really been the ugly duckling a private equity that nobody investors
5:06have increasingly been pulling their money out of venture capital because of
5:10fears that the returns were could not and I’m going to give you a snapshot of
5:14those sorts of packs as well and some of this type of analysis is the sort of
5:21thing that we go into a little more detail in our courses including so let’s
5:30get on with you about all the day 2 I’m gonna show you is essentially a hundred
5:35percent knew best
5:37its data that we have as a result of the Research Alliance we have with Burgess
5:45group who provide decision to investors and its source from about between two
5:52and three hundred of the major ambassadors talents that whole past
5:58history of cash flows valuations and maybe net asset values for unrealized
6:06and provide them to purchase so that they can track them and provide
6:12information on returns and other aspects of their forwards and so this is a very
6:18large proportion of the industry will hear about 2 trillion dollars of buyout
6:24funds and about 500 billion reflecting the fact that venture capital funds a
6:30lot smaller in size
6:34all the returns are going to be talked about on net of fees and carried
6:40interest or carry profit share in other words and so they are the returns
6:45investors actually experience not all of the investments would have been realized
6:52and whether or not realized
6:54will include the latest net asset values of the latest valuations
6:58they may turn out to be right or wrong but most the research shows that if
7:05anything they can come back to that I no longer do is to look at three different
7:14types of many ways of measuring I’m gonna start off with the way that I like
7:19best which is looking at what public market equipment what that does is it
7:25basically says every time you if you gave some money to a product you put
7:33some money into a public market in whatever issue all public market index
7:39S&P 500 or the MSCI Europe index and when you get a distribution from a
7:47project refund when they sell something give you some money back to take the
7:50money out of it so you have these two men one of which is public market funds
7:57private equity and you see it we ended the life of the farm which bucket has
8:03the most money and that’s what I’m going to start but I this is not the normal
8:10way to look at the industry that the funds in particular still like talking
8:18about money multiples multiples always look at the amount of money you go back
8:25relative to the amount of money it doesn’t take account of what you could
8:28have done
8:29else you could have done without money just as I put it a hundred pounds and I
8:32got back you can see the problem there what happens if the stock market tripled
8:40it would look very good on the other hand if the stock market to Fulham by
8:4450%
8:46so there’s a problem with my multiples in my view and that’s why we tend to
8:51look at I R Us which is like rates of return which is again one of the
9:01industry tends to focus on although investors are increasingly interested in
9:06public market and I started by asking them to dial the clock back to 2011 1
9:162011 what about that because this is where the data up to the point that we
9:22publish that paper that I referred to start in the journal Science we used a
9:27tie up to the end of 2009 shown here in the old line is the median here be all
9:36the funds in two trillion dollars all you’ll notice here that extended you
9:48seen the footage is global buyout so actually I the paper had originally just
9:53focused on the USS this is now extended to global and you’ll see the same sort
10:00of results through in terms of if you ignore the last few years there was
10:07always know year except in 1995 when private equity didn’t be public how to
10:14interpret that because in every vintage year every year until 2006 with the
10:22exception of 1995 the average the media is about walk in other words you ended
10:29up with more money from private equity you do and this averaged about 25% over
10:38that like which is how we get to the sort of 3 percent annual return because
10:45the fund it doesn’t having somebody invested evenly throughout those ten
10:52twelve years ago when you work it out on an annualized
10:57you’ll notice you know that the more recent vintages are global financial
11:07crisis struck after 2000 and 2008 and these are songs that started investing
11:14in 2007 and 2008 and 2009 funds reinvesting post now that’s what we saw
11:23in 2011 the recent months were very immature many of them had that she
11:30invested the time now been a click the the clock hold and show you how
11:35performances of all over the last five years so you have to look at the screen
11:40white casket stage because the only thing that’s going to change the date
11:44and this will be to show you how those returns vehicle so we take the clock for
11:50one year that’s what happened just very moderate in those lines to see the early
12:00years nothing much changed because actually these funds will mature and
12:03they’d given all the cash back investors so you have to look towards the right
12:07hand side of this ticket for another year
12:12slight changes but not very much 2014 is flattening out a bit in recent years and
12:21then the most recent data we have available to us to 2015 were again you
12:26seen the slight flattening out in recent years
12:30slight lower e you like in some of those made two thousand now to give you a
12:37sense about what that you know the before and after I’m now put those
12:42together
12:43shot so the blue line is what we were seeing in 2008 apple and orange line is
12:52the what we see in most recently you’ll see that the sort of mid 2000 vintages
13:00have gone a little bit was and the more recent ones before and after the
13:06financial crisis got a little bit
13:08so nothing much in some ways nothing much has changed in the last five years
13:15and that’s very surprising because as we know lots of things been happening since
13:19stock market exhaust huge increase in the stock market since the financial
13:26crisis and yet as we take the clock forward from 2011 we see that the
13:32private equity returns have been moving pretty much in lock step with public
13:36markets and that’s not altogether surprising because the private equity
13:44firms had to sell their investments needed they buy their problem often from
13:50public markets are sometimes they they they also valued relative when public
13:59markets do what he does well and so what we see is this sort of they’ve been
14:08moving in lock-step and so there hasn’t been much change in the outrage however
14:16these two other things I want you to look at one of which is the trend in
14:21this line you look here even though on average over that period
14:26clearly they’ve been fooling for every vintage year since 2001 on average the
14:34median fund every year with the exception of 2009 with as little ticked
14:40off every year since 2000 and also you can see that everything to chip post
14:492005 the PME is at or below in other words private equity has been doing
14:55about the same a small slightly since 2002 I don’t keep those two things in
15:03your mind before but I also want you to look at the distribution because
15:09everybody goes away said the project which is nice take class with is a big
15:13difference of the best funds in the worst unlike publication
15:21so what I’ve done this charge of show you what’s been happening to that
15:29difference between the best and the worst and again you can see that there
15:33is a bit from you to you but it’s definitely been coming down and in the
15:37last few years the difference between the top and the bottom quartile funds
15:41has been about 25 p.m. et you know the words you’ve got about 25 percent more
15:48relative to public markets listing the top to the bottom as much as it used to
15:55be used to be more like seventy by and so there has been some convergence
16:01so where do we stand today so we’ve had this historically strong forms
16:09public market average historically 327 looking back over the nineties thousands
16:16the nineteen eighties but we’ve seen medium period declining steadily and the
16:25more recent vintages actually falling below and we had talked walter is also
16:34falling steadily so you can take solace in the fact that overlaps the average is
16:39changing maybe the top or refunds are still has to perform just as well that
16:46isn’t the case and we’ve got the gap between the top and bottom so one quote
16:55that one slogan I would I introduced him is that everybody used to say all you
17:01gotta get in the top hotel brands but I say this all is the next cool tell if
17:08you’re aiming for those sorts of returns that you historically got from the top
17:1210% that’s very challenging if you’re an investor to find them which ones those
17:21raised another question which is you know all those facts this asset class do
17:29you wear competition a new entry
17:33of money is eroding excess I’ll leave that hanging for you to draw your
17:39conclusions but if you believe that it certainly brings us back to the fees in
17:48all their variants the carried interest because this is where you typically paid
17:55between one and a half of 2% indirect these is a lot of these companies and
18:02the investor funds so it’s an expensive move into mediation and it raises
18:12questions in my mind about how sustainable those very all the data
18:16showed you just to reiterate is net of those however they’re reasonably
18:23positive way to spin recent events and that’s what I want to and this is what
18:27you generally there’s some interesting differences let’s look at multiples
18:36multiples or rather put those where the investments not been realized it also
18:43includes the remaining value their total value to aid in cap its cash and
18:53remaining investments to the amount of cash you seen over the last four years
18:59those recovered very very nice that in the two threes amp in the 2008 vintage
19:06back in 2011 just after the financial crisis was the amount of the valuations
19:16of those investments in the light was roughly the amount you had a daughter
19:22who is now those funds have $10 enjoy it all work out why because public markets
19:33have returned and is parked public markets came back the tide raises all
19:38boats the public market companies and great the bridge the project
19:45and I suppose one question that investors should ask is how much credit
19:49did you give to the product be fun sports for macro trends in either
19:54direction either if the market falls on the market you’re not really paying the
19:58time the markets you’re paying them to do good so i think thats why many
20:04academics and that’s just no not the absolute return relative to the IRS as
20:17well here I put on the axis drawn a line at 888 percent is the interest rate
20:26internal rate of return many funds have to achieve before they get carried
20:31interest and you can see here that now many of these funds are actually going
20:38to be paid interest in particular
20:41recent vintages since 2005 the median fund in most of those years is going to
20:49be paid carried interest I profit share for doing well I remember what I should
20:54do that for those funds that for me at all near
21:00return so they’re getting paid propecia
21:04for me about in line with public markets and so we’re very interesting situation
21:13that we’ve seen these big vintage ears which were about 800 million was raised
21:22over the period before the financial crisis
21:252006 to avoid we now see that the median seven and eight pounds well into the
21:32Carrie 6 2006 funds are closed but they actually underperform public markets so
21:39that raises now of course it’s not over yet because the amount of those funds
21:47that are unreal
21:49sized is quite high because they haven’t been going down law said you look here
21:54what I’ve done is give you another view inside how private resent to you both
22:00the realized and unrealized other words how much cash did you put in cash if you
22:08cut out that’s the realized and unrealized is in line and I should
22:17expect the percentage of cash to unrealized goes off and the time and so
22:26clearly a lot could change in the next few years and indeed with recent polls
22:31in stock market since the start of the year
22:34some of those unrealized blue lines are definitely going to be low because as
22:40soon as I showed only a private equity moves lock-step with those blue lines
22:48are gonna come back maybe some of those are no longer so it’s not over yet as
22:59the evidence of shows the sort of most recent now because I’ve been talking at
23:07all about violence and if you do the same analysis for them it’s a very
23:11different story
23:13shown here how how good its walls in many of those early years back in the
23:22nineties and how since then since really the dot-com bubble birds for mrs Bieber
23:29spectacularly below but and if you look in the last four years how the day truth
23:39if anything some of those me to thousands of actually got worse than
23:45they were back in early 2004 they haven’t realized the returns venture
23:51capitalists or on the other hand the last few been to Jews have done have
23:57been revised upwards so the 2008 2009 10:55 actually been revised upward so
24:05that actually looking at me they make out so if you put these two models you
24:17see a similar story that this trend among other people have now been getting
24:27their money back and indeed to some extent the more recent vintages
24:32that you’re getting every dollar you put in you’ve been getting back close to 1.5
24:38dollars which has led venture capital to have a bit of a renaissance as we’ve
24:43seen with more money being assigned to it and the returns you look at IRS it’s
24:51a similar story the IRS have definitely been getting better you notice these
24:55charts having different slope to the white house down with generous people
25:05and that’s i think in my view because because investors retreated out of
25:12education and the returns got because there was less money chasing deals now
25:17if you want to put all these things together
25:20buyouts and be sealed the same charge you get an interesting chart for much of
25:28the last two thousands buyouts were doing a lot better
25:34the money market here but you can see that actually the VC funds seem to be
25:43doing
25:43sort of the same old since I T bank’s assets to thousands so I think it’s no
25:54longer the ugly duckling but of course you always gotta look in the headlights
26:00are out in the rearview mirror there’s been a lot of money flooding it so it
26:08may be that the people who braved invested in 2009 10 are the ones who are
26:14going to make those who were flooding in 2060 maybe making much less good so just
26:26to conclude this brief can’t around the evidence on private equity returns of
26:32trying to give you a historical perspective and also really on my view
26:37is as each year goes by sort of evidence that private equity returns similar are
26:45converging actually get strong that there’s there is a chart showing the
26:52sort of a special by outside the reductions in public market equivalent
26:58down to public market seems to be a secular trend has been going on for a
27:05few years now and I think that even though historically the results of the
27:13recent performance has only been at or just below the public markets now it’s
27:21certainly true that multiple and recovered as the markets recovered but
27:29the strange thing about this is that means that you know that the fees and
27:36carried interest go eat just because the markets have gone but I find that
27:40difficult to see what you want people to be close
27:46benchmarks not to to get paid when the benchmark itself goes up and so that’s
27:52why I asked the question
27:56you to judge as much as me it hasn’t changed so far and investors happen
28:02haven’t really been putting so much pressure on the funds to change that
28:08part I think that my interpretation is that these skills of private equity
28:16funds have our schedules and eventually what happens use investors want to put
28:22money to work with people with scarce skills and an adult mately a lot of the
28:26returns are appropriated by those and this is what we see many other asset
28:31classes and so I think that tends to happen over time and i think that that
28:40leads to more competition which drives that when that happens in most other
28:45asset classes pressure comes all the fees and that’s i think is going to
28:51happen private there are just too many fees which are both headline and the
28:58more companies are pretty significant and so I think those things are going to
29:07be the focus of a lot of attention
29:09indeed in the you s already has been a little looking
29:14the fees that it charged for private by private equity funds to their portfolio
29:21companies and I think this may ironically I say be their salvation
29:25because it may help to drive down because of the even though investors
29:33hadn’t really driving may be objecting as much of a slightly more positive note
29:41I personally think that the fact that those pre-crisis LBO actually only
29:47slightly below property market is actually very impressive because you
29:51know you would have expected leverage their returns to companies with very
29:57highly leveraged capital structure lots of debt to pool very badly in to go
30:04bankrupt and things went
30:06crisis struck with I think that the chosen impressive ability for private
30:14equity funds to manage through a crisis and set up fairly robust capital
30:20structure and interesting lesson to be learned that to some extent very
30:28illiquidity of project maybe it’s maybe another positive aspect the fact that
30:33investors have committed project under 10 years and therefore they have to
30:38commit the private equity fund is working through a hard period means that
30:43they can’t quit neither side investors nightly investors northern and the fact
30:51that these funds performance pompoms came back is a positive thing it meant
30:57that investors didn’t quit at the wrong time so actually I think that it’s one
31:03of my thoughts he resisted actually there’s a lot of evidence behavior which
31:08says people tend to quit investments or sell after fools and by after rises and
31:15generally speaking as a very bad and private equity structure is sought to
31:20stop doing now just to finish off will we get back to three to four percent
31:27returns over public market I sort of doubt it especially at the moment is
31:32there so much money flooding in to the asset but you know I think that it might
31:38be that the returns the funds will continue to produce good returns some of
31:44those funds without public markets to get into the best that lower fees over
32:00three structures if you want more on this just google my name and private
32:08equity
32:09get it creepy or go to SSRN Stockholm where our hand thank you very much we
32:25will be taking questions we have a number already so I’ll start reading
32:38them out to answer the first question is from Sanjay Sanjay good for you to join
32:47us again explain the difference what explains the difference
33:05reasons well the reason why public markets and private equity markets might
33:14have to is in my view a fundamental level down to the government’s so you
33:20are you happy
33:22markets you have management teams who dispersed ownership you’ve got boards of
33:33directors which oversee the management team and management teams might have a
33:37stake in the business but it might be separation of ownership and control and
33:43in the public markets you have a lot of folks on executive pay on bone a series
33:48on things like that and you’ve also got a lot of folks on short run hitting your
33:54targets quarterly reporting analysts forecast things like that in the private
34:00equity market you got a very good governance structure where where you
34:05belong with me and said the manager you can operate with very different capital
34:18structures which can be more efficient
34:21and I think that the fundamental drivers here are those that you you may be a
34:27trance you can do
34:29transformational change more easily if you are out so when we see those medium
34:35returns being a bob public markets what that’s really telling you is an art
34:41imitated senses it’s not all about management’s in historically future
34:46doctor the dark or picked got the median return it was good that was fine return
34:52you are getting 30 percent per annum and so but of course if you can find those
34:59best managers the top court top managers then that’s great and investors like
35:04yell group login deep relationship managers do diligence over the years can
35:11do that is that their returns have been very impressive but even those investors
35:15who came in historically and got the average returns with and i think that
35:20that is driven more by the fundamental difference between the government
35:24structure private equity and the next question is that excess return provided
35:41investment professionals to the public markets
35:57yes good question and one that always comes up I think the answer to that is
36:01in a nutshell it depends who you are if you’re an endowment
36:07like the Oxford endowment investing for 800 years the illiquidity premium you’re
36:13prepared to accept his I would say extremists you could get one tenth of
36:18one percent per year
36:20more from investing in liquid assets over 800 years that’s going to be a lot
36:25of money and of course it depends a bit on whether you need to sell these you
36:32have a large need
36:34liquidity such so I think that you’re looked at the liquidity premium are
36:43really investor specific and indeed if one looks at oneself you know if you are
36:49investing for retirement your illiquidity premium should I would put
36:53it to you if you’re investing in the short term with a view to wanting to
36:59trade a lot and made you realize the assets and sell assets real estate to
37:04buy a house or something like that of course you care alot about and primary
37:11reason really suitable for you so I would say that most of the ester resins
37:17seat of liquidity premium you know they definitely buried between investor but I
37:22would be full investors like pension funds insurance companies down when
37:28officers who have long term long term aids I would have an interesting
37:36conversation trying to argue with them if they thought their liquidity premium
37:40was much more than one and in that case historically only three to four percent
37:46comes from just a good question
38:43positively in the last 45
38:51can go further than that and try to say how to adjust for leverage and the like
38:59there I think you have to be quite careful and this isn’t the time or place
39:03we could have a whole weapon on how to leverage effects risky but clearly there
39:08are some you know I should take a more leverage the risk goes up
39:13theory tells you goes up in a little away I don’t believe that’s the case
39:17against the time to go into that but I think your general point is well taken
39:26and I think it’s one of those things where when private equity was in its
39:30infancy everybody referred to it as an absolute return as in other words they
39:36were aiming to make sort of cash returns in any market I think that the read the
39:43evidence suggested shows to do anything but in that class
39:47lock-step with public markets and so therefore it should be remunerated
39:51relative to the risks of public markets and the unreturned I think you’ll see
40:00which way I swear I think that in the nineteen in the nineteen nineties
40:37extreme and big spread in return you look across the industry as a whole it
41:01did then came you know the dot-com bubble which really hit the PC market
41:08much more than the 398 nineteen ninety miles and they so you know that we had a
41:25roughly ten years of very poor returns and now that would be about in line and
41:32so that’s the third half is you have to be careful though to how you measure is
41:38because obviously the theory tells you that you should be looking at systemic
41:44risk systemic risk and I think that most of the risk in venture capitalist
41:52idiosyncratic risk in other words is a very strong chance that you know there’s
41:57this quite a high probability that a new venture will fail but it’s not so relate
42:02and so when you’re looking at risk adjusted returns you need to look at a
42:10systemic risk of the sector and the beach the risk of some of the sector is
42:18actually pretty similar to the Peter risk of buyouts
42:22why is that world underlying equity Peterborough BC is iffy about 11 and a
42:32half something like that the underlying risk of the type of private equity
42:37buyout by is lower but then they leverage them up and they get to about
42:41the same now so maybe they point seven feet
42:45equity company they could leverage on it comes on so I think the risks of these
42:52things and certainly you know how they compared the performance compared with
43:06just buried historically those three different periods
43:14question how does the return profile such as change across market segments
43:25yeah well that’s quite a complex question in a way I mean if you if you
43:37look at the data we have available at the moment is very good with you as good
43:43for europe and virtually non-existent emerging markets by which I mean China
43:50emerging markets for private equity China India Africa Latin America and
43:56it’s very hard to give much of an indication about how many systemic level
44:05how good the returns be in terms of geography the returns in venture capital
44:13definitely better in the USA and Europe
44:17routes they’ve been about the same here so there has not been a big difference
44:24between the returns across Europe and the USA across segments it really varies
44:31over time you know you do see some periods where you get very good returns
44:37like you’re there was a fantastic returns give
44:44buyouts in retailing rest rolls every restaurant in the UK is owned by private
44:52equity firm that’s true too many European Cup
44:56and indeed the us- and the returns they made on those have been extremely good
45:02we saw a bloodbath in financial services after crisis not altogether surprising
45:08so it it’s very variable and choosing the right segments to be at the right
45:15time there so I think at the moment people are defensive type stocks which
45:24are defensive companies which you know will do well if there is a if there is
45:29some sort of downtown again and we haven’t had much of an uptown we had
45:34some I don’t see you know it’s now seven years now eight years nearly eight years
45:39since the financial crisis so very often you have another downturn 28 years and I
45:47think people are looking for the investments which will do well if there
45:52is a town so yeah that’s one of those questions which is hard to give a simple
45:57question from jail asks what is the potential
46:15determined if any historical private equity our performance
46:23yes good question what we have done is we used multiple indices to work we
46:33always use local indices servicer European underinvestment we tend to use
46:38European
46:40we very often use start off by the large cap indices like 500 light but we also
46:48looked at whether how they compare to the Russell 2000 Russell 3000 indices
46:55like that you could basically benchmark private rooms any individual and it
47:01depends a bit what question you’re asking the question from the point of
47:05view of a large institutional
47:07mister what you know what’s the alternative if they don’t put money into
47:13privately where will they put it many of them would say well we’re so large that
47:18we will tend to go larger indices you know you might say small-cap index of
47:26small-cap indices are very small relative size of institutional and so
47:32you can check out you can check out the returns against all those that you’re
47:38going to have to look in a published papers in this webinar but you’re seeing
47:43now is that we actually use multiple the general result has been as you move
47:49towards slightly lower cap indices or ones which have got smaller companies in
47:56the fullness of private equity goes down a bit but doesn’t altogether go away and
48:02that suggests that there is a loading if you like in their own signs I think they
48:09are they do they don’t tend to buy the very large companies they do tend to buy
48:14pool and that the returns on those have been historically a bit better than the
48:22large-cap companies that’s why the returns the excess returns slightly
48:31worse it looks like slightly smaller but they’re still that question of questions
48:41did you find in any relationship between funds what about the stickiness of our
48:58performance of general partners and is there a difference since European
49:09managers ok all good questions are on some very
49:14very quickly the first question and it will be fascinating to look at in other
49:20words do the funds that charge large piece do better I haven’t looked at all
49:27the data we can to get his net of fees but it’s a very good question can be
49:31very hard to disentangle the true restructures but that’s a good question
49:37and we don’t nobody quite knows the answer in terms of the the next question
49:46as part of it is that is there any sort of stickiness in the performance of GP’s
49:54we’ve looked at that I can point you to a paper comin papers on my website which
49:59and the general counsel seems to be that that keep people has gotten much less
50:05persistent overtime so there was quite a lot of evidence Sakura toppling GPS on
50:10to you will like it
50:1533 but most of the evidence recently seems to be the at assistance gone it’s
50:23disappeared
50:24is there a difference between the returns in Europe and the us- I’m not
50:32actually except on the PC side so the performance of fund managers GPS in
50:39Europe has been found in line certainly since the 2003 us-led was a lot further
50:47advanced in the Europe so they weren’t nearly as many fund managers in the
50:51nineteen nineties in Europe but since then has been quite similar and that
51:01sort of makes sense because it’s actually a very global market and you
51:04find global firms who have the same
51:07offices in European capitals as well as in the USA and so they bring the same
51:12technology techniques some of the same now and then the final question was
51:17signs and performance we don’t we’re sort of expected that as fun size went
51:23up
51:25we have the evidence seems that there’s no compelling evidence as yet that there
51:34is this cool to this economy of scale is the more money you take on the worst
51:40thank you very much for your time today thank you for joining us on today’s
52:07webinar just some details regarding our executive problem equity program that we
52:14have a little background about private equity of the school we were one of the
52:23first business schools to writing project equity in the something we take
52:28very seriously we have our own private equity which produces up-to-date
52:33research demonstrated on today’s webinar so it’s part of what we do here is not
52:43school and as you can see two compliments
52:48academic rigor we bring the industry experts we bring in partners as well as
52:56general partner reebok has over 30 years of experience in private equity and he
53:03focuses on and how general partners create value through the asset class and
53:13solved in that surprised that so I’m very very much focuses on general
53:21partners great we have Jack edmondson partner from our very own diamond found
53:29at the University of Oxford and interesting there now
53:35University entitlement management have heard from heat 22 almost 90% more
53:49seriously allocating more capital to and then to complement that we have David
53:57Stern who works for CDC
54:02development finances to show the UK’s older Africa close on 70 is section is
54:15very interesting and it looks at how development finance essentially
54:20contributes to private equity but their balance sheet investor outlook is
54:26slightly different to that of a general part that is very interesting to see how
54:31that to some of the unique selling points the program we look at which he
54:46both in terms of the great industry but also as we look at our own property
54:57investments as well as fun level benchmarking and performance in emerging
55:07markets and exit routes
55:12deals which was today’s presentation we do battle as a full model for
55:28early-stage private equity and we will be covering the french couple on the
55:34program as well so I just want to thank you very much for your time today as you
55:40can see the program will run from a weaver Rick
55:45we’ve caught over the class is already subscribed so we all essentially over
55:51hopeful so if you would like to join us
55:55get in contact
55:59clocks profile typically each year is an equal split between limited partners and
56:07general partners we also got a number of corporates specifically investing in
56:15some ways as limited partners and we get a number of corporate lawyer is an offer
56:26private equity transactions and M&A transactions on lines and we are
56:34increasingly getting more professionals and entrepreneurs as well so called part
56:44of the group specifically working in equity date and number of involved in
56:53the sector but also involved on slotting home defenders and leaving him to set
57:02off as well so please join us for us
57:06substantial copper program and if you have any questions please drop me a line
57:15or better yet just contact me a call to talk about the program and the school in
57:24order to thank you very much for your time today and for joining us and thank
57:32you very much
