The Myth of Private Equity

Once an obscure niche of the investment world, private equity has grown into a juggernaut, with consequences for a wide range of industries as well as the financial markets. Private equity funds control companies that represent trillions of dollars in assets, millions of employees, and the well-being of thousands of institutional investors and their beneficiaries. Even as the ruthlessness of some funds has made private equity a poster child for the harms of unfettered capitalism, many aspects of the industry remain opaque, hidden from the normal bounds of accountability.

The Myth of Private Equity is a hard-hitting and meticulous exposé from an insider’s viewpoint. Jeffrey C. Hooke―a former private equity executive and investment banker with deep knowledge of the industry―examines the negative effects of private equity and the ways in which it has avoided scrutiny. He unravels the exaggerations that the industry has spun to its customers and the business media, scrutinizing its claims of lucrative investment returns and financial wizardry and showing the stark realities that are concealed by the funds’ self-mythologizing and penchant for secrecy. Hooke details the flaws in private equity’s investment strategies, critically examines its day-to-day operations, and reveals the broad spectrum of its enablers. A bracing and essential read for both the financial profession and the broader public, this book pulls back the curtain on one of the most controversial areas of finance.

Over the last two decades, the private equity industry managed to cast a spell over institutional investors, convincing them to pay billions of dollars for lackluster returns. Jeffrey C. Hooke’s book uses accessible language and compelling data to break down the myth of private equity performance and should be required reading for all public pension fiduciaries. -- Randi Weingarten, president, American Federation of Teachers

Jeffrey C. Hooke’s The Myth of Private Equity is a terrific read. It is nontechnical and full of important and interesting facts about an industry that has been feeding off public pension funds and nonprofit investors for far too long. This book was long overdue. -- Richard Ennis, cofounder, EnnisKrupp, and former editor of the Financial Analysts Journal

Hooke provides a great public service by explaining a complex topic in plain language and in an engaging way. -- Ludovic Phalippou, academic area head of the Finance, Accounting, and Economics Group, Saïd Business School, Oxford University

The Myth of Private Equity should be required reading for institutional investors tempted by Wall Street marketing of pricey and risky “alternative” investments. Count on Hooke to decode the jargon, ask the right questions, and prove that the promise of outsized gains in return for eye-popping fees is a mirage. -- Joe Torsella, board member of the Pennsylvania Public School Employees Retirement System and former state treasurer