Is Private Equity still outperforming the public markets?

Is Private Equity still outperforming the public markets?

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?

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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
8:46so 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
12:43shot 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
25:43sort 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
32:09get 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
46:40we 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
50:24is 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
51:25we 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

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