PE breaks records in fundraisings, but returns may be disappointing

INSTITUTIONS and wealthy private investors have been enamoured of private equity since the 2008 financial crisis, as rock-bottom interest rates spurred a search for alternative assets that could outperform, with a low correlation to traditional public markets.

Since the start of the financial cycle in 2009, some US$5.8 trillion has flowed into PE, as Bain & Company's Global Private Equity Report for 2019 points out. This abundance of capital has raised competition for assets. As at 2018, the amount of dry powder or uninvested capital is estimated by Preqin at a record US$2 trillion. So far, return…