Private Equity in the Doldrums and Out of Favor With Some Institutional Investors

Ally Financial Tower, Detroit. Photo: Jeffrey St. Clair.

For years, private equity funds attracted institutional investors — pension funds, university endowments, insurance companies, sovereign wealth funds – that could afford to tie up funds for long periods of time with a promise that returns would substantially outperform the stock market. And, during the go-go years between 1995 and 2000, the median fund in a smaller PE industry did outpace a rising stock market. For a few years following...