Hedge funds/private equity: Turf wars

Why are private equity firms so worried about hedge funds moving onto their turf? The simple answer is competition. It’s not just a question of more firms competing for scarce deals. Private equity firms fear that hedge funds may have a big advantage. That’s because hedge funds promise lower returns to their investors than private equity firms do. In theory that means they should be able to pay more for companies than the likes of CVC and Permira. Hedge funds are certainly behaving as if priva...