Institutional investors pride themselves on taking a long-term approach, yet when it comes to public and private equity, they often apply very different standards. While private equity managers are afforded a decade or more to deliver returns, public equity managers can find themselves under pressure after just three years of underperformance.
But Aziz Hamzaogullari, chief investment officer of Loomis Sayles’ growth equity strategies, argues this double standard is increasingly difficult to justify. He points to evidence that private equity has underperformed public market benchmarks since 2010, despite its historical reputation for superior returns. He also questions whether the perceived lower volatility of private markets is an illusion created by infrequent valuations, while rising leverage and increased competition for deals are putting further pressure on returns.
In a conversation with Top1000funds.com Hamzaogullari examines why investors apply different time horizons to public and private equity, the risks of constantly hiring and firing managers based on short-term performance, and why greater selectivity is essential across both asset classes. He also explores the AI investment boom, arguing that while the technology will be transformational, only a handful of companies are likely to emerge as sustainable long-term winners.
What is Fiduciary Investors Series?
Through conversations with academics and asset owners, the Fiduciary Investors Podcast Series is a forward looking examination of the changing dynamics in the global economy, what a sustainable recovery looks like and how investors are positioning their portfolios.
The much-loved events, the Fiduciary Investors Symposiums, act as an advocate for fiduciary capitalism and the power of asset owners to change the nature of the investment industry, including addressing principal/agent and fee problems, stabilising financial markets, and directing capital for the betterment of society and the environment. Like the event series, the podcast series, tackles the challenges long-term investors face in an environment of disruption, and challenges investors to look differently at how they make decisions and allocate capital.