Andy Naranjo, Blake Jackson and David Ling.
From left: Andy Naranjo, Blake Jackson and David Ling.

The volatility laundering, return manipulation and ‘phoney happiness’ of private equity

Based on nearly two decades worth of private equity real estate funds data Ph.D. student Blake Jackson, Ken & Linda McGurn Professor David Ling and Susan M. Cameron Professor Andy Naranjo conclude that “private equity fund managers manipulate returns to cater to their investors”.

But why would investors be willing to pay extra for illiquidity, completely contrary to what financial theory and common sense would seem to suggest?

Read more of Jackson, Ling and Naranjo’s insights into why they argue that investors are ‘co-conspirators’ with private equity managers in this story from Financial Times