Letter to the Investment Committee on Private Equity (Ben Inker)

Citations · 6

• “over the past 10 years, public-to-private LBOs have been heavily skewed toward software, which accounts for 40% of the recent deals closed”

  p#23 · confidence 95%

• “public-to-private LBOs rank a full quality decile below small caps, who in turn are almost four deciles junkier than the S&P 500”

  p#20 · confidence 95%

• “persistence of performance has fallen notably since 2000, and more so for private equity than venture capital. A particularly relevant finding is that the interim performance of funds that have not completed their life cycles is entirely unhelpful in predicting future fund returns”

  p#47 · confidence 93%

• “Low-quality stocks, on the other hand, have consistently underperformed both the broader market and high-quality stocks despite having a consistently high beta”

  p#31 · confidence 92%

• “This leaves the aggregate U.S. equity portfolio for our institution with a 57% weight in companies smaller than the S&P 500 and a 43% weight in S&P 500 constituents. 'Indexing' the aggregate of public and private equity owned companies would assign an 82% weight to the S&P 500”

  p#29 · confidence 95%

• “we have collected, cleaned, and analyzed data for roughly 700 formerly listed developed-market companies that were taken private via a leveraged buyout from 1981 to 2025”

  p#11 · confidence 94%