As investment in private equity becomes more widespread, the industry will face more questions about its environmental, social and governance standards
OVER THE PAST year bankers and lawyers who arrange mergers between companies have been working overtime as private-equity firms buy up companies listed on stock exchanges at an unprecedented rate. Buyout groups have announced 6,298 deals around the world since the beginning of January, worth at least $513bn, according to Refinitiv, a data firm. British companies are the most popular targets. At least 13 listed ones there have been approached by private-equity outfits since the start of the year.
So why are they now spending so much? One cause is interest rates, which are at historic lows. These make debt cheaper to take on and service, swelling potential profits. They also mean that big institutional investors, such as insurers and pension funds, are searching for better returns than those available on safe assets, such as rich-world government bonds, which are almost zero.
Private equity may soon lose some of its attraction, however. Returns could fall if fund managers cannot find enough profitable opportunities. A recent paper by Josh Lerner of Harvard Business School and others shows that private-equity returns in America, its biggest market, have been on a downward trend over the past decade. Returns better than other asset classes in the past may not be a good predictor of future performance.
Brasil Últimas Notícias, Brasil Manchetes
Similar News:Você também pode ler notícias semelhantes a esta que coletamos de outras fontes de notícias.
US, UK and Israel blame Iran for ship attack; Tehran deniesThe United States has joined the United Kingdom and Israel in accusing Iran of carrying out a deadly drone strike that killed two aboard a tanker off Oman
Consulte Mais informação »
AOC Says White House, Conservative Dems to Blame for Allowing Evictions to Resume“We have to really just call a spade a spade,” said Rep. Alexandria Ocasio-Cortez. “We cannot in good faith blame the Republican Party when House Democrats have a majority”
Consulte Mais informação »
Ricky Gervais' unconventional relationship including why he won't marryRicky Gervais and his partner Jane Fallon have been together for nearly four decades, with the relationship beginning before either of them earned their fortunes
Consulte Mais informação »
Why You Suddenly Need To Delete Gmail On Your iPhoneHundreds of millions of iPhone users should delete the Gmail app after tracking warning...
Consulte Mais informação »
Former Pinterest whistleblower Ifeoma Ozoma talks about why confidentiality agreements harm tech workersBusiness Insider tells the global tech, finance, markets, media, healthcare, and strategy stories you want to know.
Consulte Mais informação »
Why businesses use so much jargonIf you want to climb the corporate ladder, it can be an advantage to indulge in waffle and learn the ever-changing jargon of your industry
Consulte Mais informação »