Private equity firms have been in the spot-light lately for all the wrong reasons. The sharpest example is Mitt Romney's Bain Capital and its controversial methods of turning around portfolio companies. There's also a class-action lawsuit alleging that 11 of the world's largest private equity shops colluded during the boom years to drive down the prices of takeover targets. Making things worse, in the 2008 financial crisis many big investors felt firsthand what the illiquidity of private equity really meant. Many needed to raise cash by selling other assets such as equities just to make good on their commitments to private equity firms. Along with other problems, including high fees and a lack of transparency when it came to underlying strategies, that experience prompted investors to rethink exposure to the asset class.
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