Private equity firms manage some trillion of global capital, yet because they are highly secretive, much remains unknown about their internal economics. How do PE firms organize themselves, for example, and how do they capitalize on their success? Some answers emerge from a paper by Wharton finance professor Ayako Yasuda and Yale School of Management finance professor Andrew Metrick titled, “ The Economics of Private Equity Funds. ” The paper was presented at a recent Wharton conference, sponsored by the Weiss Center for International Financial Research, whose theme was “A Global Perspective on Alternative Investments.” The authors gained access to an unusually fertile data set, the private equity portfolio of one of the world’s largest limited partner investors. On condition of anonymity, the investor furnished data on 238 different PE funds in which it had invested between 1992 and 2006. Of those 238 investments, 144 were buyout funds and the other 94 venture capital funds.…