Steven Schwartzman's concerns and the future of Private Equity.
"Stephen Schwartzman is without a doubt a brilliant man. However his frustration with the valuation of his Blackstone Group is well founded. Gone are the days of low hanging fruit in the Private Equity space. The combination of more stringent regulations, increased competition and a burgeoning stricter tax code creates a situation where previous profits are almost impossible to match. More profoundly, the advent of the exchange traded fund is an absolute nightmare for the hedge fund and private equity industry. How can a Fiduciary justify plowing capital at a 20%+ fee when the same risk reward parameters are available for pennies on the dollar and instant liquidity. It would be unconscionable to place your investor and any other scenario. So where is the future for companies like Blackstone and large hedge funds? To be perfectly honest it would behoove these successful giants to fold their assets into more tradeable, homogenized funds. This would also...