Framework of Alternatives: Private Equity

Ashley Kahn, CAIA from Callan's private equity consulting group explains private equity as an institutional asset class. This course covers basics such as the differences between private and public equity, the appeal and risks of investing in private equity, and its potential to outperform public equity. Key characteristics include illiquidity, return dispersion, high fees, and program complexity. Ashley outlines how private equity is typically accessed through limited partnerships, the different types of private equity strategies like buyouts and venture capital, and the importance of a well-defined investment plan. A detailed case study of a client is presented to illustrate strategic planning, commitment pacing, and the benefits of shifting to direct partnership investments. The discussion highlights targeting optimal diversification and managing commitment size and strategy to achieve long-term success.

Course time: 45 minutes