Private Equity Performance: What Do We Know?
- ROBERT S. HARRIS, TIM JENKINSON andSTEVEN N. KAPLAN
- A version of the paper can be found here.
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Abstract:
We study the performance of nearly 1,400 U.S. buyout and venture capital funds using a new data set from Burgiss. We find better buyout fund performance than previously documented – performance has consistently exceeded that of public markets. Outperformance versus the S&P 500 averages 20% to 27% over a fund’s life and more than 3% annually. Venture capital funds outperformed public equities in the 1990s, but underperformed in the 2000s. Our conclusions are robust to various indices and risk controls. Performance in Cambridge Associates and Preqin is qualitatively similar to that in Burgiss, but is lower in Venture Economics.
Alpha Highlight:
The figure below highlights the performance of the new dataset relative to datasets from prior papers by Kaplan and Schoar (2005) and Phalippou and Gotschalgh (2009).
Maybe PE/VC isn’t high beta in expensive clothing?
About the Author: Wesley Gray, PhD
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For informational and educational purposes only and should not be construed as specific investment, accounting, legal, or tax advice. Certain information is deemed to be reliable, but its accuracy and completeness cannot be guaranteed. Third party information may become outdated or otherwise superseded without notice. Neither the Securities and Exchange Commission (SEC) nor any other federal or state agency has approved, determined the accuracy, or confirmed the adequacy of this article.
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