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Private equity is only partially an asset class, according to T. Bondurant French , CEO and chief information officer of Adams Street Partners . The keynote speaker at the Beecken Smith & O'Keefe Private Equity Conference at Gleacher Center on February 25, he provided a glimpse into the latest trends and outlooks for private investing.
It has some of the characteristics of an asset class, but not all, he said. In 1989, it was clear that private equity could not really be considered an asset class, but there has been movement in that direction since then, French asserted.
Among the key characteristics required, private equity has (at least in part) definable return characteristics, a certain degree of liquidity, the ability to benchmark to evaluate the performance of a specific pool of assets, and the ability to diversify to reduce risk. Yet, even given this shift, private equity is comparatively an extremely small asset class, less that 0.2 percent of all asset classes combined.
Private equity opportunities are increasing, but allocations are increasing at a greater rate than the opportunities, French said. Due to low worldwide interest rates, people are moving money out of stocks and bonds into alternate asset classes including private equity, making this an awash in cash period.
The conference was cosponsored by the Polsky Center and the student-run Entrepreneurship and Venture Capital Group .
Donna Eckert