Private Equity Execs, Here Is Your Report Card

In an analysis of U.S. public companies, private equity firms excelled among listed asset managers for long-termism — and flunked on accountability.

Illustration by II

Illustration by II

New research suggests that asset managers are among the worst-governed public companies — and private equity firms are no exception. There is one area, however, where private equity managers excel: focusing on the long-term.

Analysis of publicly held asset managers by researchers at Swiss business school IMD showed that private equity firms like Blackstone Group and KKR & Co. exhibit less short-termism than the average asset manager. Even when the field was widened to the entire S&P 500, private equity managers still performed better than average when it came to maintaining a long-term perspective.

The study was based on a natural language analysis of public communications made by listed companies, such as 10-K reports. Words such as “monthly” and “immediate” were flagged as indicators of short-termism, while phrases like “century” and “perpetual” indicated the opposite.

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A company’s time horizon was just one of 12 dimensions of stewardship included in the analysis. They were also graded on accountability, purposefulness, care for customers, trustworthiness, harmony with stakeholders, passion, positivity, identification, innovativeness, proactivity, and prudence.


While private equity managers exhibited the least short-termism, they underperformed their peer group in other areas. Private equity firms scored well below the average asset manager on accountability — a willingness to take responsibility for good governance — and positivity, defined by the study as a “sense of positive well-being to promote a vision of the future.”

In addition, Apollo Global Management, Blackstone, Carlyle Group, KKR, and Oaktree Capital Group each scored worse than their average peer on their “willingness to take care of customers.” In this respect, Ares Management was above average for asset managers, but still worse than the typical large-cap company.

Purposefulness — a “sense of purpose for greater achievement and social good” — was also a negative for private equity firms. Apollo was the only exception, outperforming the average asset manager and the larger S&P 500.

For innovation and prudence, private equity firms still trailed the typical large-cap company, but at least performed better than most asset managers.