Capitalism on steroids

Supporters of the $10trn private equity industry say it fuels economic growth and delivers leaner, better-performing companies.One leading critic of the sector is Ludovic Phalippou, who says that the industry routinely overstates its financial performance. And, he says, private equity funds charge a whopping 6-7% a year in fees, wiping out any potential benefits to investors.In the latest New Money Review podcast, I interview Phalippou, who is professor of financial economics at Oxford University. We cover:What is private equity?How big is the private equity market?Why have private equity assets grown fivefold in a decade?What is the economic footprint of private equity?How should we measure private equity funds’ performance?How honest are private equity firms in reporting performance?Do private equity funds have higher returns than public equity funds?What do private equity funds cost?Agency conflicts in the private equity industryThe impact of recent interest rate rises on private equityThe need for standardised reporting of private equity performance.