A Fidelity Investments fund manager launched a broadside against private equity today, saying “the factors are there to indicate the end of a cycle.”
Anthony Bolton, who has managed Fido U.K.’s £3.1 billion (US$6.2 billion) Special Situations Fund for more than 25 years, said that the current private equity boom is a sign of impending doom during a discussion with Guardian Media Group Chairman Paul Myners at Fund Forum 2007 in Monaco.
“There are various stages in the private equity cycle; it has a cycle, perhaps more so than hedge funds,” he said. “I have been told by practitioners that there are good years to invest and there are bad years to invest, but the size of the deals in the industry currently has been unprecedented.”
He also decried the concentration of talent at private equity firms. “Investors in public companies are being severely disadvantaged if they don’t have the best managers running the company,” he complained. “We should have higher incentives for executives of listed companies, provided it is results-oriented—and I have gone out on a limb for this.”