Josh Lerner, Jacob H. Schiff Professor of Investment Banking at Harvard Business School
Many gems:
Q Private Equity in Asia - too much money, too little deals and signs of bubble?
A The ugly secret - returns of PE in general are 15 percent per annum. This is not horrible, or great. If you look at subset of private equity mkts in developing markets - returns per annum drop to five percent. Private Equity magic which works in states and Europe does not work in emerging mkts.
Two possibilities: First twenty years of PE market in US saw mediocre returns. Maturation process similar in the states in developing markets. Over time, PE seem to do much better. Growing pains and will still mature. Other skeptical reason is that investor rushing into this category. No intellectual reason why PE is not effective or not effective
Betting on emergent technology in Asia is not easy. Trend has been for entrepreneurs to create application for existing technology. Another trend is to move away from venture technology (e.g. Budget airlines startup business) in emergent mkts
RMB funds in China: Introduce a wedge in a lot of funds, create two set of investors in one fund. Reminds us of Biotech fighting with IT investor in US - different organizational complexity and different lp perspective. Pe already complex enough in china
