Legendary hedge-fund manager Leon Cooperman wasn’t pulling any punches as he sat for an interview in front of about 100 members of the hedge fund industry.
First he lambasted the Securities and Exchange Commission (SEC), calling it abusive and mean. Then someone asked what he thought of private equity.
“I think private equity is a scam,” said Cooperman. “They’re getting very fancy fees for sitting on your money.
The founder of the Omega Advisors hedge fund spoke before the New York Alternative Investment Roundtable at New York’s Penn Club Wednesday. He said the private equity’s high returns “have been aided and abetted by lower interest rates.” He added that low interest rates were the main reason leveraged buyouts have been able to charge high fees in a fairly valued market. He also pointed out that it’s going to get a lot harder for the private equity industry as this is no longer an under-discovered concept, there’s much more competition, and that rising interest rates would hurt new deals.