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Risk, Return, and Optimal Holdings Private (Bedah Jurnal)



 Risiko, Pengembalian, dan Holdings Optimal Swasta
Ekuitas: Sebuah Survei Pendekatan yang Ada



Andrew Ang
Columbia Business School
Morten Sorensen
Columbia Business School
ms3814@columbia.edu
Published 10 October 2012

PE funds are usually classified as purchases, venture capital (VC), or some other type of funds that specialize in equity investments - like other liquid non - registered. PE funds typically have a 10-13 year horizon, where the capital invested can not be redeemed. In addition, the partnership agreement determines the complex governance funds, determine compensation GP as a combination of ongoing costs (management costs), cost-sharing transaction (carried interest), and other costs.
 Private equity ( PE ) investments are investments in private companies are controlled , the direct trade between investors rather than through an organized exchange . PE is often regarded as a distinct asset class , and it differs from public equity investments in fundamental ways . There is no active market for PE positions , making these investments illiquid and difficult to value . Investing is for the long term .

Estimating Risk and Return Private Equity
Empirical approach commonly used to estimate the risk and return of publicly traded securities standards are difficult to apply . PE investment intricate features include unlimited data , the irregular nature of the investment , and sample selection problems that typically arise in data reporting PE . Adjusting for these difficulties requires sophisticated econometric techniques . Without adjustment , the naive analysis tends to understate risk and volatility and may overestimate the performance estimates .
Private Equity Asset allocation model that describes the transaction costs ( high to PE ) and the risk of liquidation ( which is substantial for PE ) PE recommend simple ownership . In this model , rebalancing will be rare , so the wide swings in PE ownership can be expected . In addition , liquid PE ownership will be much lower than predicted by the model asset allocation assuming that all assets can be controlled if desired .


About Issues Private Equity

Generally , the owner of the assets invested in the fund PE as an LP in which investment decisions are made ​​by the investment manager acting as GPs . This arrangement poses a potential agency problem . In the public equity markets , factor returns and active management can largely be separated because of the investable index strategy . Because PE is based on a private nature , it is difficult to conduct large studies - a systematic sample contract features and see how they relate to performance .






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