Hamilton Lane’s Hirsch on PE Returns, Sitting on the Sidelines

The video discusses the evolution of private equity as an asset class, highlighting its shift from absolute to relative returns. It explores the impact of institutionalization on private equity's information advantage and the challenges faced by asset allocators in achieving return targets. The video also examines market dynamics, particularly the reluctance of private equity to engage in distressed opportunities, and the trends in leverage and debt within the sector.

How has the focus of private equity changed over the years?

• From low to high risk

• From relative to absolute returns

• From public to private markets

• From high returns to downside protection

What has been the trend in private equity returns despite massive inflows?

• Returns have remained attractive

• Returns have been unpredictable

• Returns have decreased significantly

• Returns have become volatile

What is the expected return for private equity compared to public equity?

• Higher by 300 to 500 basis points

• Lower by 300 to 500 basis points

• Equal to public equity

• Unpredictable

Why is private equity holding back on distressed opportunities?

• Because of high interest rates

• Because of a lack of funds

• Due to high market volatility

• Due to a short market dip

What has been the impact of Fed stimulus on private equity's market strategy?

• Increased investment in distressed opportunities

• Cautious approach and waiting for market correction

• Aggressive buying of public equities

• Shift towards high-risk investments

What is one of the hardest jobs for asset allocators today?

• Predicting public market trends

• Achieving actuarial return targets

• Managing public credit

• Reducing leverage in portfolios

What has been the relationship between debt loads and interest rates?

• Constant over time

• Directly related

• Inversely related

• Unrelated