I would think the general institutional investor that is in Private Equity funds understands that they are buying into a pool of investments, each of which can be financed with X% of debt. I find it hard to believe that many really understand their fund documents that enable a Fund to borrow against itself to fund not just dividends and acquisitions(classic ways to boost reported IRR), but as a financing tool to essentially borrow against the good to fund the bad. How this doesn’t scream potential problem remains…a mystery. (from FT.com)

We know we are simple people with a simple Fund structure.  We also know the amount of money that blithely moves from client hands to well-compensated financiers is torrential. People should be paying attention to at least their own money, much less OPM.