Private equity achieves particularly high returns in times of crisis

Frankfurt The extreme price fluctuations on the stock exchanges and the tense situation on the bond markets ensure a sustained flow of funds into another area: private equity. The generic term stands for takeovers or minority interests in corporations and medium-sized companies.

A new analysis shows the reason for the growing popularity of the asset class: private equity provides investors with a significant excess return compared to the stock markets – so-called alpha. “According to our analysis of the period between 2000 and 2021, one can say that private equity also delivers excess returns over a long cycle,” says Professor Oliver Gottschalg from the HEC School of Management Paris. The average alpha compared to comparable equity investments is 9.9 percent. The analysis is based on 4,300 private equity transactions.

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