WallStreetOasis.com » Forums » Industry Specific » Private Iniquity

PE managed pricing

by pacmandefense (Senior Monkey, 69 Banana Points Points) on 6/24/08 at 11:37am

i dont understand the underlying logic of this concept.

"if up-mkt betas are greater than down-market betas, PE managers are slow to mark portfolios up and follow the principle of conservatism"

if beta*risk factor gives us the risk premium for risk exposure, shouldnt the manager be quick to markup the portfolio when beta is high in the up-mkt?

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How low will the DOW go?
8,500 - We're at the bottom
3%
8,400 - Just a bit more pain
2%
8,300 - Pain
4%
8,200 - More Pain
3%
8,100 - Lots of Pain
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3%
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30%
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