This Is Why Private Equity Is Stealing Hedge Funds’ Thunder

In recent years we've seen a number of trends in the financial markets develop, and one such trend is an increasing preference for private-equity funds over other alternative assets like hedge funds. Surveys which have identified this trend haven't offered much insight on why it is happening, although a few ideas have been suggested. Now analysts at one firm have offered up some more ideas.

Private equity has outperformed equities

Jelena Kucenko and Sarah Leissner of Credit Suisse reported recently that the Private Equity PECCI Index, which records a return on committed capital, has outperformed global equities by about 350 basis points per annum since 2001.

They also said the biggest outperformance occurred during...