
Private Equity – the case of active equity investing
Allocations to Private Equity are often a significant part of institutional investors overall portfolios. Based on a blend of market price data for listed assets and historical return statistics for private equity funds, standard portfolio optimizing techniques have sometimes been used to motivate hefty allocations to private equity as an asset class. It is a well-known fact, however, that such optimization techniques are very ill-suited for allocation decisions involving pri