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Private equity or hedge fund investments could give 6% returns

3 Oct 2012

SMU Associate Dean (Research) of the Lee Kong Chian School of Business and Professor of Finance Melvyn Teo said that it would not be easy to invest in private equity or hedge funds as compared to public equity because public information is not as easily available. Professor Teo commented that the Asian private equity market is relatively new and its development would depend on how fund managers specialising in European and American markets would perform in the Asian market. On whether more private equity firms would open in Asia, Professor Teo said that many investors are risk adverse nowadays and would usually invest in larger firms. This would be disadvantageous for new firms, and it would become even more challenging unless a fund manager has enough experience and connections in the region to buck the trend. Professor Teo was also quick to point out that research had shown that large funds did not necessarily perform better than their smaller counterpart, as they might experience diseconomy of scale.

Last updated on 20 Jul 2013 .