The rates at which private debt funds lend appear to be high enough to offset the funds’ fees and risks but not high enough to exceed both their fees and investors’ risk-adjusted rates of return, according to a working paper from academics Isil Erel, Thomas Flanagan and Michael Weisbach at The Ohio State University.
The paper evaluates the risk-adjusted returns of private debt funds, using both equity and debt benchmarks to measure risk.
To read the full paper click here.
