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Seides examines the private markets boom and whether PE/VC returns are real or an artifact of smoothed valuations and survivorship bias.
Canon
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Seides argues PE's reported returns present a false self (consistently high, smooth returns) while the true self (public-market-equivalent returns that are volatile and fee-laden) is hidden by valuation methodology.
Highlights
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Private equity returns look smoother than public equity returns because private assets aren't marked to market daily — the smoothing hides real volatility
Seides explains that PE returns appear less volatile than public markets because private companies are valued quarterly by their managers (who have incentive to smooth values) rather than daily by a liquid market. If PE assets were marked to market, their volatility would resemble public markets.