Are Investors Overvaluing Private Equity?

Private equity has been lauded for its strong historical performance relative to public markets, but this perspective should be further scrutinized. How should investors think about allocations to public and private equities? Below, we share our insights in three recent articles:

• Democratizing Private Equity : While alternative investments like private equity have traditionally been dominated by institutional investors, interest in this asset class is also mounting among individual investors. How might expanding their investor base to include these individual investors impact alternative asset managers???

• Debunking Private Equity Prestige : Alger CEO and CIO Dan Chung and Director of Market Strategy Brad Neuman, CFA , share why we believe public growth equities may present a more favorable opportunity for investors. Some of the reasons include transparency, liquidity, and fees, which make this asset class more attractive, in our view.?

“While private equity is often touted for its high returns, our analysis reveals that, after accounting for factors like illiquidity and the timing of cash flows, the dispersion of manager returns and the weak long-term performance of the median manager, private equity may not be as compelling as it is commonly perceived, especially when compared to public equities.”

• Above the Crowd: Growth Equity Outperformance offers a deeper dive into the conversation on asset allocation. Dan and Brad reflect on Alger’s 60-year history and our time-tested philosophy and process. Accelerating change is one of the reasons why they believe growth stocks have outperformed value investing over the past 20 years. In this commentary, the two explore asset classes including private equity, bonds and cash, and value versus growth stocks.?

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