Private Equity and Private Debt II

Last week I said a few words about private equity and private debt. My interest was in the investment funds that go by those two names. My chief point was that there is a trend that consists of mergers between PE and PD at one extreme, mere "alliances" among dyads of a PD and a PE fund on the other extreme. Creative contracting can create a lot of way-stations between those two extremes, but I won't go into that today.

What I'd like to do is to offer an answer to an obvious question: what does this matter? To those of you who aren't in the asset-management world, nor yet in the world of reporting thereon: should you care?

Well,you might want to care IF you worry about efficiencies in either of the corresponding public markets. If those markets (stock exchanges, and the bond trading of government issuances or of the issuances of companies that have equity on stock exchanges) were as efficient as they could be there wouldn't be a pressing need for vigorous private markets. But private markets are a critical escape valve when public markets are dysfunctional as, at present, they are.

For evidence of the dysfunction, I refer you to fine works of book-length journalism such as Scott Peterson's DARK POOLS (2013) and Michael Lewis' FLASH BOYS (2015). That is Michael Lewis in the photo above. Some years have passed since the early teens of this century. But nothing those authors lament has gotten better since then.

So two cheers for the private side of the markets!!

Comments

A Story About Coleridge

This is a quote from a memoir by Dorothy Wordsworth, reflecting on a trip she took with two famous poets, her brother, William Wordsworth, and their similarly gifted companion, Samuel Taylor Coleridge. We sat upon a bench, placed for the sake of one of these views, whence we looked down upon the waterfall, and over the open country ... A lady and gentleman, more expeditious tourists than ourselves, came to the spot; they left us at the seat, and we found them again at another station above the Falls. Coleridge, who is always good-natured enough to enter into conversation with anybody whom he meets in his way, began to talk with the gentleman, who observed that it was a majestic waterfall. Coleridge was delighted with the accuracy of the epithet, particularly as he had been settling in his own mind the precise meaning of the words grand, majestic, sublime, etc., and had discussed the subject with William at some length the day before. “Yes, sir,” says Coleridge, “it is a majesti

Five Lessons from the Allegory of the Cave

Please correct me if there are others. But it seems to be there are five lessons the reader is meant to draw from the story about the cave. First, Plato is working to devalue what we would call empiricism. He is saying that keeping track of the shadows on the cave wall, trying to make sense of what you see there, will NOT get you to wisdom. Second, Plato is contending that reality comes in levels. The shadows on the wall are illusions. The solid objects being passed around behind my back are more real than their shadows are. BUT … the world outside the the cave is more real than that — and the sun by which that world is illuminated is the top of the hierarchy. So there isn’t a binary choice of real/unreal. There are levels. Third, he equates realness with knowability. I only have opinions about the shadows. Could I turn around, I could have at least the glimmerings of knowledge. Could I get outside the cave, I would really Know. Fourth, the parable assigns a task to philosophers

Searle: The Chinese Room

John Searle has become the object of accusations of improper conduct. These accusations even have some people in the world of academic philosophy saying that instructors in that world should try to avoid teaching Searle's views. That is an odd contention, and has given rise to heated exchanges in certain corners of the blogosphere. At Leiter Reports, I encountered a comment from someone describing himself as "grad student drop out." GSDO said: " This is a side question (and not at all an attempt to answer the question BL posed): How important is John Searle's work? Are people still working on speech act theory or is that just another dead end in the history of 20th century philosophy? My impression is that his reputation is somewhat inflated from all of his speaking engagements and NYRoB reviews. The Chinese room argument is a classic, but is there much more to his work than that?" I took it upon myself to answer that on LR. But here I'll tak

Jamesian Philosophy Refreshed

Search This Blog