How Levered Promotes Harm Investors
指出私募股权行业当前杠杆使用不当，高杠杆基金中管理者的附带权益主要奖励市场风险而非管理技能，每年导致约3.3%的负超额收益，损害投资者利益。
There is increasing concern about whether private equity investments provide attractive risk-adjusted net returns. Current leverage practices exacerbate such concerns. The industry has conflated financial leverage with attempts to reward skill. Although generally agnostic about leverage, the author is somewhat dismayed by the industry’s implementation of levered investment strategies. Consider the following: 1) The industry’s practice of utilizing low leverage in core funds and high leverage in value-added and opportunistic funds should be reversed. 2) The industry’s practice of paying managers a promoted interest in the context of highly levered funds leads to the managers being largely rewarded for beta, not alpha. 3) High leverage leads to an increase in the volatility of the funds’ returns, which in turn leads to an increase in the managers’ expected promote. Instead, promotes should be computed on an unlevered basis, independent of how the fund is actually financed. These three items collectively contribute approximately 3.3% per year of negative alpha to value-add and opportunistic funds.