Author: Eileen Appelbaum and Jeffrey Hooke

Promises of Superior Investment Returns Prove Illusory Even as the stock market is in free fall and interest rates are rising, private equity funds continue to pursue new investors. They peddle the myth that private equity returns defy the laws of financial gravity and yield strong returns even in periods of economic turbulence and declining values of publicly traded companies. How is this amazing sleight of hand accomplished? The truth is that in turbulent times these companies often cannot be sold for the price set by the General Partner. The General Partner of a Private Equity, or PE,…

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