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Market-Based Solutions to Vital Economc Issues

Private Capital

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The Private Equity Research Consortium and the Institute for Private Capital (IPC) at the University of Oxford, Saïd Business School will host the 2021 Spring Private Equity Research Symposium on May 27. The Spring Symposium supplements, and will follow the same format as, the long-standing PERC Fall Symposium that takes place each year at UNC. The conference will be held virtually this year for the safety of our members and attendees.

Many providers of defined-contribution investment plans, such as 401(k) plans, have advocated for broader access to private investments. In this Kenan Insight, we examine the operating, regulatory and legal constraints involved in allowing that access, and explore what, if anything, retail investors are likely to gain from investing in private funds.

UNC Kenan-Flagler Business School Professor and Institute for Private Capital Executive Director Shawn Munday sits down virtually with Kenan Institute Executive Director Greg Brown to explain all the buzz around Special Purpose Acquisition Corporation, commonly known as SPACs.

We propose and test a framework of private information acquisition and decision timing for asset allocators hiring outside investment managers. Using unique data on due diligence interactions between an institutional allocator and 860 hedge fund managers, we find that the production of private information complements public information. The allocator strategically chooses how much proprietary information to collect, reducing due diligence time by 18 months and improving outcomes. Selected funds outperform unselected funds by 9% over 20 months. The outperformance relates to the allocator learning about fund return-to-scale constraints and manager skill before other investors.

Since 2001, the number of financial statement line items forecasted by analysts and managers that I/B/E/S and FactSet capture in their data feeds has soared. Using this new data, we find that 13 item surprises—11 income statement and 2 cash flow statement analyst and management guidance surprises—reliably explain firms’ signed earnings announcement returns.

This paper evaluates the pros and cons of including private equity fund investments in defined contribution plans. Potential benefits include higher returns and improved diversification as well as a relatively safe method for accessing investments previously only available to institutions and the very wealthy. Despite these enticing benefits, they need to be weighed against potential challenges and costs that may arise from creating this broader access to private funds.

With COVID-19 cases on the rise, much uncertainty remains about how much more damage the pandemic will inflict on the U.S. economy, particularly on certain sectors and small businesses. What is clear, however, is that many businesses will continue to require infusions of capital to stay afloat, and that private sector capital providers will need to play a role in long-term recovery efforts. In this Kenan Insight, we explore how those providers will need to shift their approach to risk assessment in the post-COVID world, and what opportunities might be created for investors who can solve two outstanding issues.

With COVID-19 cases on the rise, much uncertainty remains about how much more damage the pandemic will inflict on the U.S. economy, particularly on certain sectors and small businesses. What is clear, however, is that many businesses will continue to require infusions of capital to stay afloat, and that private sector capital providers will need to play a role in long-term recovery efforts. In this Kenan Insight, we explore how those providers will need to shift their approach to risk assessment in the post-COVID world, and what opportunities might be created for investors who can solve two outstanding issues.

Private equity continues to grow as a major investment vehicle in the U.S. and globally. The 12th annual PERC Conference will build on its legacy as a leading research symposium in the ever-expanding field of private equity.

Please join us for an exclusive conversation with Harvey Gantt, architect, politician and former mayor of Charlotte, on Thursday, Oct. 29. This virtual experience is part of the Dean’s Speaker Series, hosted by Kenan-Flagler Business School Dean Doug Shackelford.

In this virtual fireside chat, Kenan Institute Senior Fellow Mary Moore Hamrick, CEO of Political Quotient Advisors, will explore the political landscape ahead of the historic 2020 U.S. presidential election.

On Wednesday, Oct. 28, the Kenan Institute hosted a virtual fireside chat with Senior Fellow and Political Quotient Advisors CEO Mary Moore Hamrick. In discussion with Director of External Affairs MacKenzie Babb, Hamrick talked through the current political landscape just one week before the historic 2020 U.S. presidential election.

Our Private Capital Experts

Greg Brown

Executive Director, Kenan Institute of Private Enterprise; Sarah Graham Kenan Distinguished Professor of Finance, UNC Kenan-Flagler Business School

Christian Lundblad

Director of Research, Levin Distinguished Professor of Finance, and Associate Dean of the PhD Program, UNC Kenan-Flagler Business School

Centers & Initiatives

Institute for Private Capital

Creating transformative knowledge of private capital.