FEG's Research Review brings you the monthly economic and market commentary, as well as an in-depth focus on a current topic of significance.
July 24, 2015
Normally life plods along with a consistent familiarity following a well-established routine. Occasionally, we are faced with a shock to the system as we transition from one life event to another. Transitions can be disruptive and uncomfortable, shaking and spinning us into a new reality that requires time for acclimation before a new routine can begin. In the future, we may look back at the second quarter of 2015 and see a transitional period that marked the end of the duration tailwind that supported financial assets and the beginning of a new reality of higher interest rates that may be less accommodating to stocks and bonds.
FEG's Capital Quarterly Review delves into alternative investments such as natural resources, private equity, and private real estate.
June 1, 2015
Private equity has frequently been in the news in 2015. There were positive headlines, “Private Equity Exit Volume Hits Record Level in 2014,” and those less flattering, “Pension Funds Can Only Guess at Private Equity Cost.” Increased attention on the industry should not be a surprise. The asset class grew to the equivalent of 4% of the global stock market capitalization at the end of 2014, up from 1.5% in 2000, and regulators have stepped up oversight in the Dodd Frank era. The most informative headline might have been McKinsey & Company’s report, “Private equity: Changing perceptions and new realities,” published in April 2015. The report highlights private equity’s historic outperformance of public equities on a risk-adjusted basis, but notes the ability to consistently produce that outperformance has become harder than ever.