A new think tank by the name of American Compass recently made headlines as a “conservative” foe of private equity by launching its new “Returns Counter.” This project purports to compare the returns of private equity against public capital markets, and was launched with a politicized primer on mergers and acquisitions, private equity, and hedge fund investments.
Wells King, research director at American Compass, opens his post by casting aspersion at private capital markets, asserting that: “the buying and selling of companies, the mergers and divestments, the hedging and leveraging, are not themselves valuable activity. They invent, create, build, and provide nothing. Their claim to value is purely derivative—by improving the allocation of capital and configuration of assets, they are supposed to make everyone operating in the real economy more productive.”
Read more at Real Clear Markets.
Written by: Doug McCullough, Director