This week we chat with Josh Lerner, the Chair of the Entrepreneurship Unit and the Jacob H. Schiff Professor at Harvard Business School. He has recently been named one of the 100 most influential people in private equity over the past decade by Private Equity International magazine. He currently serves as Vice Chair of the World Economic Forum’s Global Agenda Council on the Future of Investing.
The Lead Left: Professor Lerner, you have a unique perspective on the private equity industry. What issues are front and center for you today?
Josh Lerner: There are several issues floating around that are of intense interest to private equity. There’s particular anxiety around fund structures. The general theme is LPs exploring alternatives to the traditional structures. The first option is going it alone with direct investments or co-investments. Another option is to create separate accounts with more favorable economics. Finally, there’s the intent, not always successful, of large institutional investors working together, thereby bypassing the fund structure altogether.
This is really all about experimenting with a fund model that has been traditionally resistant to change.