Financial wizardry breathes magic into private equity returns

Press/Media: Expert CommentPopular

Description

Rob Bauer, a finance professor at Maastricht University, says US regulators have “opened a can of worms” by permitting DC pensions to invest in private equity.
“There is a lack of transparency around performance metrics such as IRRs. How can an unsophisticated individual investor be expected to understand these issues,” says Mr Bauer, also the executive director of the International Centre for Pension Management (ICPM) in Toronto.
He warns that commercial DC pension providers lack the incentives to ensure that the transparency and governance of private equity meets best practice standards and is in the interests of clients.
“These DC managers are mainly interested in supplying funds for which they can charge higher fees which is good for their bottom line,” he says.

Period21 Jun 2020

Media coverage

1

Media coverage

  • TitleFinancial wizardry breathes magic into private equity returns
    Degree of recognitionInternational
    Media name/outletFinancial Times
    Media typeWeb
    CountryNetherlands
    Date21/06/20
    DescriptionRob Bauer, a finance professor at Maastricht University, says US regulators have “opened a can of worms” by permitting DC pensions to invest in private equity.
    “There is a lack of transparency around performance metrics such as IRRs. How can an unsophisticated individual investor be expected to understand these issues,” says Mr Bauer, also the executive director of the International Centre for Pension Management (ICPM) in Toronto.
    He warns that commercial DC pension providers lack the incentives to ensure that the transparency and governance of private equity meets best practice standards and is in the interests of clients.
    “These DC managers are mainly interested in supplying funds for which they can charge higher fees which is good for their bottom line,” he says.
    URL https://on.ft.com/2VeVfGm
    PersonsRob Bauer