TY - JOUR T1 - Sub-Optimal Risk–Return Profiles in Private Equity:<br/> <em>The Case of Minority Business Enterprises Investing</em> JF - The Journal of Private Equity SP - 61 LP - 72 DO - 10.3905/jpe.2011.14.4.061 VL - 14 IS - 4 AU - Cyril Demaria Y1 - 2011/08/31 UR - https://pm-research.com/content/14/4/61.abstract N2 - The influence of socially responsible investing (SRI) on large and listed companies is limited. Private equity could be successful but methods have to be adapted to avoid the costs associated to SRI post-investment monitoring. Criteria have been applied in the investment screening process, notably in minority-related private equity investments. Despite its promising endeavour, minority-related investing is still not part of mainstream private equity, because the minorityrelated private equity risk–return profile is sub-optimal. The roots of the underperformance lie in the definition of intervention of private equity fund managers focusing on different opportunities. The author suggests that these private equity fund managers redefine the scope of their intervention from geographical or ethnical criteria to underprivileged people. Private equity fund managers will need to redefine the way they create value for their portfolio companies. The extra work would result in risk reduction and benefit usual private equity investors.TOPICS: Private equity, ESG investing, fundamental equity analysis, risk management ER -