Podcast: Ludovic Phalippou talks Private Equity Risk

Professor Ludovic Phalippou of Oxford University says GPs must accept that some elements of the PE model are not working so well for LPs. Is he a threat to the industry or its saviour?

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Private equity has consistently outperformed many public markets, but only if you pick the indices that help you tell that story. There are plenty that haven’t.

That’s the view of Ludovic Phalippou, professor of financial economics at Oxford University’s Saïd Business School. In this 18-minute podcast, the author of Private Equity Laid Bare discusses what he sees as the industry’s greatest pitfalls and why greater transparency in fee reporting and performance will help LPs and GPs alike.

“You cannot have a sustainable industry if you hide things, if the public opinion is against you,” Phalippou says. Private equity does have a role to play in society, but GPs must accept that some things are not working so well for LPs. If they don’t, he warns, it could come back to bite them.

Read Phalippou’s 2019 paper on modifying carried interest here.