But if you buy into the notion of the university as a place where private investments bear fruit for private returns that kind of speaking truth to power role is less and less possible.
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In his paper "Private Equity Performance: Returns, Persistence and Capital Flows, " published a few years ago with Antoinette Schoar of MIT, Kaplan suggests that private equity returns are worst when fundraising is strong.
Those liquidity facilities charge borrowers a penalty rate which makes them less attractive as private credit returns.
And even if private equity returns are disappointing in the long term, just placing the buyout bet lends a boost to earnings in the here and now.
We believe it is the best analysis of the venture industry, which typically is very private about its returns data.
Since private-equity returns still top most other investments, money is expected to continue to flow to buyout pros, even if it comes at a slower pace.
And even if private-equity returns are disappointing in the long term, just placing the buyout bet lends a boost to earnings in the here and now.
In October, the University of California became the latest pension-fund investor, after state pension funds in California, Texas and elsewhere, to bow to legal pressure to release private-equity returns.
As for sovereign wealth funds from the Middle East, these cash-rich buyers do not need the kind of aggressive, short-term private-equity returns that propelled buyers like Harry Macklowe and his lenders to take outsized risks.
Buyout shops usually like to point out that American workers benefit when private equity funds score big returns because pension funds are some of the biggest investors in private equity funds.
Studies suggest that leverage accounts for between one-quarter and one-third of returns at private-equity-backed firms.
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Once the government starts cutting returns, private fund managers should really be in business.
Returns from private investment accounts, they reckon, will be unable to make up that shortfall.
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Kaplan compare the returns of private equity and venture capital funds with those of various stock indexes.
The official said areas such as renewable energy and scientific research are underfunded by the private sector, because returns are uncertain.
The returns from private management and investment could be high.
The German government may not be as nationalistic as the French, but, as in France, German private-sector bank returns are dragged down by rivals, such as the state banks, which do not have to maximise profits.
And because hedge funds are under pressure in their traditional business, which is short-term arbitrage in liquid markets, they are attracted by returns from private equity potentially at least double what they expect from their usual activities.
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In South Korea in 1964, devaluation and an increase in interest rates overseen by the dictatorship of General Park Chung Hee brought the returns to private investment closer into line with those to the economy as a whole.
The flows into risk-free assets by central banks and private investors has plunged returns on these assets into negative territory, and pushed investors out along the risk curve into assets that are close substitutes to risk-free assets (such as investment grade U.S. corporate bonds).
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If the bailouts work, rates on government bonds would likely rise as investors abandon fear trades and opt for higher risks and returns in the private-sector markets.
For years endowments led by the likes of Harvard University and Yale University rushed into private equity investments to boost returns, but the global financial crisis has caused many endowments, particularly larger ones, to shift their strategy.
Therefore, he feels that returns should be calculated using private equity industry standards versus mutual fund industry ones.
They long since moved into alternative assets such as hedge funds and private equity, and have reaped handsome returns.
Compared to private equity and public markets, those returns look even more abysmal.
Private-equity firms can get better returns on their money when the debt they can raise for buyouts is relatively inexpensive.
Another rationale for the move into alternative assets (as hedge funds and private equity are known) is that returns are uncorrelated with those on other assets.
For years America has talked about a federal infrastructure bank, which would blend private and public finance and would yield returns over a long number of years.
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Private-equity backers say their funds deliver returns that are similar to or superior than stocks, but uncorrelated to broader stock-market moves.
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