Carlyle\u2019s entry into the economic-data fray is notable for another reason. Private-equity portfolios were once too disconnected from the broader economy to offer a read-through; common stock in highly leveraged companies can only say so much about the economy as a whole, which depends more on credit than stock prices, no matter what headlines you read. <\/p>\n
But private capital\u2019s growth into new sectors and credit give a wider window that\u2019s now worth peeking through. \u200b\u200b<\/p>\n
\u201cThe size of the portfolio, that\u2019s number one,\u201d Carlyle\u2019s chief economist, Jason Thomas, tells me. \u201cAnd second, when you have control positions or significant influence in companies, you get access to a lot more information \u2014 order books, backlogs, prices paid, prices received, headcount.\u201d <\/p>\n
That\u2019s data that public-company shareholders, to say nothing of bondholders, could only dream of. It\u2019s also more detailed than anything the government has. <\/p>\n
The chunk of the economy in private hands has raised some concerns for policymakers, who worry they can\u2019t tell what\u2019s happening. One solution is to nudge companies back into the public markets<\/a> by reducing the burden. Another would be forcing more disclosure at private companies; Washington has tried this a bit<\/a> in the context of combatting money-laundering and terrorist financing, though not yet for financial bills of health. <\/p>\n A third, though, is to embrace that huge swaths of the economy are, and will be, private, and for more firms like Carlyle to realize it\u2019s in their interest \u2014 and ours \u2014 to know what\u2019s going on there. What has lived as a secret sauce inside Carlyle for more than a decade might now inform policymakers flying blind.<\/p>\n \u201cYou look back over the past five years, and [our data] is mapping right on top of actual GDP,\u201d with some statistical fixes to correct for sectors, like consumer goods, where Carlyle is smaller, Thomas said.<\/p>\n","protected":false},"excerpt":{"rendered":"Carlyle\u2019s entry into the economic-data fray is notable for another reason. Private-equity portfolios were once too disconnected from…\n","protected":false},"author":2,"featured_media":201615,"comment_status":"","ping_status":"","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[11],"tags":[64,63,99,164],"class_list":["post-201614","post","type-post","status-publish","format-standard","has-post-thumbnail","category-economy","tag-au","tag-australia","tag-business","tag-economy"],"_links":{"self":[{"href":"https:\/\/www.newsbeep.com\/au\/wp-json\/wp\/v2\/posts\/201614","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.newsbeep.com\/au\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.newsbeep.com\/au\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.newsbeep.com\/au\/wp-json\/wp\/v2\/users\/2"}],"replies":[{"embeddable":true,"href":"https:\/\/www.newsbeep.com\/au\/wp-json\/wp\/v2\/comments?post=201614"}],"version-history":[{"count":0,"href":"https:\/\/www.newsbeep.com\/au\/wp-json\/wp\/v2\/posts\/201614\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/www.newsbeep.com\/au\/wp-json\/wp\/v2\/media\/201615"}],"wp:attachment":[{"href":"https:\/\/www.newsbeep.com\/au\/wp-json\/wp\/v2\/media?parent=201614"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.newsbeep.com\/au\/wp-json\/wp\/v2\/categories?post=201614"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.newsbeep.com\/au\/wp-json\/wp\/v2\/tags?post=201614"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}