Charting the Course: Dispersion of Returns by Private Equity Strategy

Dispersion of PE returns outline

For private equity, more than many other asset classes, strategy implementation format selection is crucial.

The spread of investment returns between the various sub-strategies over the time is significant, as this chart illustrates. Given the potential dispersion of returns coupled with the diversity of investment sub-strategies, investors should have functional experts who really understand their areas of focus. The functional experts should have both asset-specific skills (for example, buyouts, real estate, credit or infrastructure) and structuring skill sets (such as primary, secondaries, or co-investment).

Unlike primary investing, co-investment and secondaries investing are reactive for the most part, yet typically require faster decision-making and execution.

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