Former Apollo partner Sachin Khajuria argues that sector regulation should target operational standards generally rather than targeting private equity sponsors specifically.
Assertion Not checkable as stated
Khajuria: Conservative internal risk management prevents systemic risk in private equity
“We're not seeing systemic problems with private equity. There are very few that go bust. And I think not just because of the corporate veil point, but I think also just the way their own risk management is set up. It's inherently very conservative.”
Assertion Not checkable as stated
Khajuria: Distressed credit funds take 10%+ risk for 6-7% LP returns
“Because I, you know, if you take a distress fund or a credit fund, a lot of the things I've been offered, they're taking 10 plus percent risk at least, but they're offering six, seven. Doesn't make sense.”
Prediction Not checkable as stated
Khajuria: Retail portfolios will eventually hold 10% to 50% in private markets
“Most portfolios, if not all portfolios, including more retail as finance becomes more democratic, will involve some portion of Private markets at some point, whether that's 10%, 30%, leading up to 50%”
Insight
Khajuria: PE fund durations match institutional LP liability requirements
“Durations match, broadly speaking, the requirements of the underlying investor. And the reason that you're seeing increasing diversification in those durations is not just because the industry is growing, and therefore it's growing in different ways, different…”
Opinion
Khajuria: Private equity lobbying is no worse than other corporate sectors
“And I don't think that lobbying is so by implication, so out of control that it has to be reined in for this industry versus either reined in in general or looked at from a broader perspective.”
Insight
Khajuria: Private equity knowledge moats cannot be replicated by hiring talent
“They have an amazing network of data, executives, knowledge, know-how, and this gives them a fantastic edge even before you look at things like size and scale. They have great information, and they're able to capitalize on it. That's not something you can just…”