As part of calling attention to cycle shifts, I thought it important to review the private equity sector after its meteoric rise in capital formation and outsized returns over the past three years.

Estimates of capital invested in private equity funds are in the $1 trillion area. Private equity funds are un-regulated pools of invested capital for the purpose of investing in non-public companies. Ten years ago, private equity was largely venture capital invested in young, emerging companies engaged in new technology, bio-technology or energy technology. By investing in non-public entities, the capital was illiquid for up to ten years or until the non-public entity went public. It was offered to ultra-high net worth investors who met high minimum financial and acceptability requirements. The funds were attractive investments because of the high prospective returns from a sale or successful public offering of one of these ... Log in to view full article.