Harvard and Yale Will Finally Lift the Veil on Private Assets
Private equity has been slowing for years. But without public markets to dictate prices, it’s been easy to ignore the impact on valuations.
Buyer’s regret?
Photographer: Mel Musto/Bloomberg
If I told someone with even a little investing experience that I own an asset that pays like stocks but is stable like bonds, they would probably think I was a huckster or a fool. Yet many of the most sophisticated investors claim to own such a thing.
I’m referring to private assets, a broad group that includes stakes in companies, loans to businesses and physical commodities, which are often the biggest holding in pension and university endowment portfolios. The allure of private assets isn’t necessarily superior performance relative to comparable investments in public markets. Rather, it’s that, because they don’t trade on volatile public markets, portfolio managers can pretend that their private investments don’t fluctuate much in value — and that any changes are mostly to the upside.