Much of the controversy around private equity has missed the point. It has focused on the relationship between private equity managers and the companies they control. Yet on average private equity managers do not seem to harm the companies they control. Meanwhile, a second key relationship has...

Many private equity (buyout) managers generate three streams of management revenue. Management fees and carried interest are agreed with investors in advance and are fully visible. The generic term “2 and 20” refers to these. The third stream consists of portfolio company fees. These are not...

Almost exactly 30 years ago, a famous article by Michael Jensen in the Harvard Business Review predicted that private equity would “eclipse” the public corporation because it was a superior form of corporate ownership. Trends since 1989 seem to bear out Jensen's prediction. Much time and...

Policymakers need to change the way they think about so-called “sophisticated investors.” The way they think about these organizations now disenfranchises the millions of ordinary people these big investors represent and makes it literally impossible to hold such big investors to account....