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As Private Equity Funds Get Bigger, They May Be Less Likely to Deliver

Posted by Metals Corporate on

By John McDonald Private equity funds are getting bigger and bigger, capable of raising larger and large amounts of capital. Unfortunately, just because a fund is setting records for equity raises does not mean it is going to be a successful venture for investors.  According to the Wall Street Journal, “megafunds” of $10 billion or more have performed only “roughly in line with the S&P 500” rather than exceeding that market’s performance, as one would expect. Private equity funds have a historical reputation for returns closer to 20 percent and higher rather than just barely over 14 percent, as the...

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