One final
word of caution or restraint, if you will. Private equity is a catchall
term that encompasses venture capital (earlier stage investments that
are much riskier than buyouts), mezzanine finance (which has more muted
returns and balance-sheet risk) and buyouts (small, medium, large and
"mega.") Headlines about private equity were until very recently
predominantly positive, and many investment firms use the term without
sufficient disclosure. To that end, we would caution any investor to do
their homework and make sure that they understand the stage,
capitalization, leverage, holding period and structure of their
commitment to private equity along with the backgrounds and track
records of the principals they are considering for investment.
