The private-equity industry has a cash problem
Little wonder its investors are protesting
![Illustration of a large balloon, with a hand dropping a small coin into a person's hand](https://www.economist.com/cdn-cgi/image/width=1424,quality=80,format=auto/content-assets/images/20240316_FND003.jpg)
How much money are your private-equity investments making? The question is easy to answer for other asset classes, such as bonds or publicly traded stocks. All that is required is the price paid at purchase, the price now and the time that has elapsed between the two. It is less obvious how returns for private-equity investments should be calculated. Capital is earmarked for such investments, but it is only “called” once the investment firm has found a project. There is little information about value once invested. Cash is returned in lump sums at irregular intervals.
Explore more
This article appeared in the Finance & economics section of the print edition under the headline “Show me the money”
Finance & economics March 16th 2024
- Is the bull market about to turn into a bubble?
- China’s economic bright spots provide a warning
- China is churning out solar panels—and upsetting sand markets
- Saudi Arabia’s investment fund has been set an impossible task
- The private-equity industry has a cash problem
- Russia’s economy once again defies the doomsayers
- How NIMBYs increase carbon emissions
More from Finance & economics
![Solar panels installed on the roof of a building at Skardu in Pakistan's Gilgit-Baltistan region.](https://www.economist.com/cdn-cgi/image/width=1424,quality=80,format=auto/content-assets/images/20250215_FNP002.jpg)
Cheap solar power is sending electrical grids into a death spiral
Pakistan and South Africa provide a warning for other countries
![People walk at Zaryadye park with the Kremlin and St. Basil's Cathedral in the background in Moscow, Russia.](https://www.economist.com/cdn-cgi/image/width=1424,quality=80,format=auto/content-assets/images/20250215_FNP502.jpg)
Russian inflation is too high. Does that matter?
In a strong economy, price pressure can endure for a long time
![illustration of a house cut in half diagonally, the lower corner being a bill.](https://www.economist.com/cdn-cgi/image/width=1424,quality=80,format=auto/content-assets/images/20250215_FND001.jpg)
Why you should repay your mortgage early
For the first time in decades, the arithmetic suggests settling housing loans
How AI will divide the best from the rest
Optimists hope the technology will be a great equaliser. Instead, it looks likely to widen social divides
The danger of relying on OpenAI’s Deep Research
Economists are in raptures, but they should be careful
Elon Musk is failing to cut American spending
DOGE has so far disrupted everything in government bar the deficit