Freakonomics Radio 654. Is the Public Ready for Private Equity?
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Nov 21, 2025 
Elisabeth de Fontenay, a Duke Law professor specializing in corporate law, and Steven Kaplan, a finance expert from the University of Chicago, discuss the implications of new retail access to private equity. They explore whether this access is a genuine opportunity or a potential trap for everyday investors. Topics include the hidden risks of private markets, the performance history of buyouts, and the challenges faced by retail investors, including high fees and limited deal access. Can democratizing private equity truly benefit the average American?
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Crowding Eroded Private Equity's Edge
- Elisabeth de Fontenay warns outperformance has declined as more capital chases the same deals and valuations rise.
- She argues private equity may have converged with public markets, reducing any institutional advantage.
Avoid Thinking Retail Access Is Free Value
- Avoid assuming retail access equals a fair shake; private fund fees (2 and 20) and limited offerings make costs high.
- Expect retail investors to receive second-tier access and layered fees compared with institutions.
Retail Money Targets The Party's Leftovers
- Retail investors will likely get weaker, smaller-ticket deals because fund managers prefer large institutional checks.
- De Fontenay says retail capital is being courted because institutional pools have been tapped out.