Private equity returns Look again

Private equity profits look mind-boggling. Goldman Sachs, for instance, has reportedly generated annual returns on its buyout funds of 42% since 2000. Over the past five years, US private equity funds have earned around 15% per year, according to Boston-based investment advisors Cambridge Associates. During the same period, the S&P 500 has generated annual gains of less than half that amount. Such figures look great in private equity marketing materials. But they should be treated with caution. ...