Canadian Report Finds that U.S. Private Equity Investment Costs Are Significantly Underreported

Alternative asset classes – particularly private equity – are typically more expensive and have more complex cost structures than public asset classes, making cost disclosure and benchmarking difficult.  A recent report by an independent benchmarking and research organization based in Toronto analyzed the reporting and disclosure of private equity funds and determined that less than half of the substantial private equity costs incurred by U.S. pension funds are currently being disclosed.  This article summarizes the key findings in the report.  See also “Four Recommendations to Help Private Equity Fund Managers Reduce the Risk of Conveying Misleading Valuation Information to Prospective and Existing Investors,” Hedge Fund Law Report, Vol. 6, No. 14 (Apr. 4, 2013).

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