Ep34 “Why Has Private Equity Grown So Much?” with Eric Zinterhofer

What accounts for the recent growth of private firms? In this episode of All Else Equal: Making Better Decisions, hosts and finance professors Jonathan Berk and Jules van Binsbergen welcome Eric Zinterhofer, founding partner of Searchlight Capital Partners, to discuss the fundamental tradeoff between Public Equity and Private Equity, and how having a manager with more skin in the game creates greater returns, but at a cost of greater risk.
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[@SGB-hq4dk]

Good diversification strategy and intermediaries have found ways to engage smaller investors. IMO.

[@Hansa7122]

Very interesting!

[@Kalpesh_Jangale]

Thank You!!

[@sammusariri5054]

A statement was made-that some managers would prefer taking equity over shares. Whats the difference?

[@jonnyfavela1011]

they mean the same thing. colloquially, we refer to public equity ownership stakes as shares, and “taking equity” as direct ownership illustrating how public shareholders are a degree removed from management and operation

[@jonnyfavela1011]

I will say however, in this case, he was referring to shares in a private company over equity in a public company for compensation reasons. public company management teams get paid in options, while private company management teams can sometimes participate in profit sharing

[@rgeller2]

What % of PE funds and firms beat S&P 500 index over the time of investment in the fund for the LPs? 20% about, and these top quintile don’t want individual money but big institutional chunks