Private Markets: Governance Issues Rise to the Fore

By Stephen Deane, CFA, published 12 June 2024, DOI 10.56227/24.2.7, on an online survey fielded 10 to 22 October 2023 to a random sample of 60,000 CFA Institute members, 20,000 in each of the Americas, EMEA and Asia Pacific, returning 848 valid responses for a 1.4 per cent response rate and a margin of error of plus or minus 3.4 per cent at the 95 per cent confidence interval. A majority, 51 per cent, believe some practices could be improved but problems are not significant, 24 per cent see substantial problems or market failures and 17 per cent believe private markets function well; 44 per cent believe general partners hold nearly all the negotiating power. Support for specific measures runs 79 per cent for an annual audit by an independent public accountant, 70 per cent for quarterly statements covering fees, expenses and performance and 61 per cent for a fairness or valuation opinion on any adviser-led secondary transaction.