Has Persistence Persisted in Private Equity?

The Harvard Law School Forum on Corporate Governance and Financial Regulation 2014-04-21

Summary:

Editor's Note: The following post comes to us from Robert Harris, Professor of Finance at the University of Virginia; Tim Jenkinson, Professor of Finance at the University of Oxford; Steven N. Kaplan, Professor of Finance at the University of Chicago; and Rüdiger Stucke of Saïd Business School at the University of Oxford.

In our paper, Has Persistence Persisted in Private Equity? Evidence from Buyout and Venture Capital Funds, which was recently made publicly available on SSRN, we use detailed cash-flow data to study the persistence of buyout and VC fund performance over successive funds. We confirm the previous findings that there was significant persistence in performance, using various measures, for pre-2000 funds—particularly for VC funds. Post-2000, we find that persistence of buyout fund performance has fallen considerably. When funds are sorted by the quartile of performance of their previous funds, performance of the current fund is statistically indistinguishable regardless of quartile. At the same time, however, the returns to buyout funds in all previous performance quartiles, including the bottom, have exceeded those of public markets as measured by the S&P 500.

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Link:

http://blogs.law.harvard.edu/corpgov/2014/04/21/has-persistence-persisted-in-private-equity/

From feeds:

Blogs.law Aggregation Hub » The Harvard Law School Forum on Corporate Governance and Financial Regulation

Tags:

academic research empirical research private equity firm performance private funds robert harris rüdiger stucke steven kaplan tim jenkinson venture capital firms

Authors:

R. Christopher Small, Co-editor, HLS Forum on Corporate Governance and Financial Regulation,

Date tagged:

04/21/2014, 12:00

Date published:

04/21/2014, 09:34