Keeping Score, Fast and Slow (Hint: It’s Not Just About the Game of Golf)

Most of the times ideas come up from unusual sources, often unexpectedly mixed. This is what has happened with this post, in which I am writing about how score keeping in the game of golf and decision making psychology can provide insights about the valuation of investment performance. Continue reading

Asset Managers Are from Mars, Investors Are from Venus (Part 2 – A Space-Walk Down to Earth)

In the first part of this post, I wrote about how differently asset managers and investors react to stressfull situations, with the retreat to the cave of the ones contrasting with the need for increased communication and transparency of the others. Continue reading

Can I Teach Your Money the Duration Trick?

Even the most sophisticated among us, when a magic trick is performed well, can’t resist its fascination. Let’s admit that. As small kids we thought there was some special power in the hands of the magician. Growing up, we all know that is an illusion, misdirectional cheating. But we keep asking HOW it’s done. Continue reading

A Challenging Validation, “a contrario”

Over the past two weeks, the conversation and the exchange of emails with a highly reputable and quant skilled professional in the private equity industry have posed an interesting intellectual challenge and created a very useful opportunity for testing “a contrario” the DaRC methodology and for discussing the relation between duration and time horizon. Continue reading

Aim Well Before Shooting for the (Private Equity) Stars

If you are shooting for the stars it may be wise to look for some reference points to be sure you are aiming in the right direction. Careful navigators always check the Pointers to confirm they have correctly identified the Southern Cross before marking the route. Continue reading

Hey Hey My My, Private Equity Can Never Die

One of the likely most memorable achievements of David Rubenstein will be not about private equity, in the strict sense – it will be the rap he sang in the Carlyle’s 2014 Holiday message to investors. Musical license for musical license, he might as well have come up with a rock song to introduce his recent predictions about the evolution private equity industry. Neil Young would forgive that it is me instead to “use” the song for a few related comments. Continue reading

PE Duration Disambiguated (Smooth Capital)

Getting responses to questionnaires is an art and I can’t say I master it. Nevertheless, I had a few especially kind readers of my previous post who contributed their opinion (thanks!) to the embedded polls. Their results make it more interesting and “independent” to define “surprising” certain different data available in the industry. Continue reading

The PE S-Curve, Dug Out

There are a couple of concepts that qualify a discovery – even if just stumbled upon: novelty and usefulness. With respect to private equity, the S-Curve adds the notion of decreasing marginal returns to improve the mainstream J-Curve notion, and this clears novelty. What’s left now is to dig out its usefulness. Continue reading

The PE S-Curve, Stumbled Upon

Unexpectedly last week, I stumbled upon an S-Curve hidden between the lines of a study released by an established private equity funds of funds firm with a cautious introductory question: “do private equity funds sometimes just run out of steam?Continue reading

Carlyle, Blackstone and Private Markets’ Beta

In the last few days, Carlyle first and Blackstone almost right after released investor updates and provided interesting information about the growth estimates of the value of their private equity funds for 2013 and the first quarter of 2014. Continue reading