Rapid City Journal: ‘Private equity’ firms often misunderstood

In yesterday’s Rapid City Journal, columnist Rick Kahler said the following about private equity:

That is exactly what a private equity company does. It brings together substantial investors, usually institutions, pooling their money to purchase companies not available on public exchanges. This requires raising or borrowing amounts that may be in the billions of dollars. The minimum to invest in a public equity company is often one million to $25 million or more, putting it out of reach of most Americans.

However, that doesn’t mean John Q. Public doesn’t own a slice of the private equity pie. Public pension funds, like the South Dakota Retirement System, have invested more than $200 billion in private equity funds. The SDRS invests more than 10 percent of its $7.8 billion fund in private equity. Many investment officers and committees feel this is such an important asset class that not holding a portion of their portfolio in private equity would violate their fiduciary duty to the fund.

To read the full article, click here.  To learn more about how private equity helps pensions funds, visit Private Equity at Work’s investor’s page.