article thumbnail

What Private Equity Investors Think They Do for the Companies They Buy

Harvard Business Review

In particular, we are interested in how many of their responses correlate with what academic finance knows and what it teaches. Rather, they rely on internal rates of return and multiples of invested capital. the notion that debt financing can be “cheap” at certain times). What PE firms do after they invest.

CAPM 8
article thumbnail

How the Next Generation Is Approaching Society’s Biggest Problems

Harvard Business Review

First, private citizens, particularly younger people, are choosing different types of career paths. How did Sal Khan finance his venture? His backers believe that investing in Khan Academy represents one of the highest returns in improving education around the world (see this HBS case for more on how funders decided to get involved).

Bond 12
Insiders

Sign Up for our Newsletter

This site is protected by reCAPTCHA and the Google Privacy Policy and Terms of Service apply.

article thumbnail

Venture Capitalists Get Paid Well to Lose Money

Harvard Business Review

There are, of course, individual firms that succeed in generating venture rates of return. But they are too small in size and too few in number to make up for the vast majority of funds that fail to generate attractive returns (or any returns) for investors. Finance Venture capital'

article thumbnail

Could a Four-Year-Old Do What Carl Icahn Does?

Harvard Business Review

And now, just after passing the average life expectancy for an American male , he seems to be in the midst of the best run of his career. r>g: Economist Thomas Piketty’s formula for spiraling wealth inequality, in which the rate of return on capital is higher than economic growth, has its critics. But applied to U.S.

Hedge 8