Private equity risks gorging on its secret sauce

Private-capital pioneers, such as Blackstone’s (BX.N) Steve Schwarzman, benefit from public-market inefficiencies even as their listed buyout shops grapple with chronic valuation problems. Investors prefer pedestrian but steady management fees over the lumpy share of fund profit that is the industry’s special sauce. It’s yet another inefficiency on which to capitalize, but only up to a point. READ MORE