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

Harvard Business Review

” PE firms typically take three types of value increasing actions — financial engineering, governance engineering, and operational engineering. In financial engineering, PE investors provide strong equity incentives to the management teams of their portfolio companies.

CAPM 8
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Why Those Guys Won the Economics Nobels

Harvard Business Review

Back in the ‘60s, people developed the capital asset pricing model [CAPM] as a way to do that. And the theory that was available then was CAPM. And in those early tests, it seemed like market prices mostly obeyed both CAPM and the efficient market hypothesis. He draws on an engineering literature called robust optimal control.

CAPM 8