Ah but "theoretically" is the key. PE returns actually don't seem that great for investors -- but they are great for the PE firms with management fees, sweet heart asset sales, etc. See the case of the Sears bankruptcy for example. https://www.chicagotribune.com/business/ct-biz-sears-sues-lampert-esl-bankruptcy-20190418-story.html …https://twitter.com/Molson_Hart/status/1119348518550933504 …
To use the word "theoretically" differently, the theory says, basically, on average, everyone gets boned after fees. "Index funds" blah blah. This said, you can see the appeal of these PE firms to pensions. Many of the large ones, if I am not mistaken have beaten the markets.