Private Equity or Hedge Fund

Hedges says hedge fund managers are increasingly seeking out returns and are thus “going to more illiquid securities and investing in private equity because they have the opportunity to do so when they talk to companies that they are going to invest in.” Private equity managers, he says, “are great research engines that have tremendous operational and industry expertise but they don’t have any way to monetize it in the public securities market,” he says. Private equity managers are also “concerned about distribution management. When you take a company public you want to be in a position to [know] what type of trading strategy should be implemented and who the other market participants are.”