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Innovator Article

Symposium Shines Spotlight on Private Equity

By Alex Russell

The Graduate School of Management hosted its second annual Symposium on Financial Institutions & Intermediaries in March, bringing together two dozen top scholars and industry practitioners from around the world.

Organized by Associate Professors Ayako Yasuda and Roger Edelen, the symposium focused on private equity, an asset class that typically raises capital from institutional investors to invest in companies that are already private or are public and then taken private.

Yasuda said that private equity funds are becoming a more important asset class for public pension funds and others, but have not been as thoroughly researched as banks or mutual funds. Republican presidential nominee Mitt Romney’s experience as co-founder of Bain Capital has turned a national spotlight on private equity as a political issue.

“That’s increasing the mental share of private equity and its role in the economy in the press,” said Yasuda. “This is not an abstract, esoteric topic up in the ivory tower.”

Keynote speaker Raymond Chan of the private equity management firm Adams Street Partners presented an internal analysis based on his firm’s confidential, proprietary data that explored the risk-return relationships in various segments of private equity, from venture capital to corporate buyouts.

“This makes for a veritable Disneyworld of insights for academics,” said Edelen. “Private equity represents an increasingly important channel for capital allocation. It has several unique dimensions that provide an intriguing setting for economic study. Often, these insights come totally out of the blue, sparking new angles on the structuring of academic inquiry.”