Private equity performance: can you learn the recipe for success?
Loading...
URL
Journal Title
Journal ISSN
Volume Title
School of Business |
Bachelor's thesis
Unless otherwise stated, all rights belong to the author. You may download, display and print this publication for Your own personal use. Commercial use is prohibited.
Authors
Date
2017
Department
Major/Subject
Mcode
Degree programme
Rahoitus
Language
en
Pages
24
Series
Abstract
In this thesis, I study the relationship between private equity fund managers’ experience and fund returns. Previous private equity research has focused mainly on the performance persistence of fund returns and the contribution of this paper is to study the learning effect of private equity funds’ general partners. The data used in this thesis is collected from the SDC Platinum VentureXpert and the EurekaHedge Private Equity database. I restrict the study to US buyout and venture capital funds with vintages from 1980 to 2001. The VentureXpert data has an extensive coverage of funds in 1980’s and 1990’s whereas the EurekaHedge contains data on more recent funds. To investigate experience, I use the fund sequence as a proxy for the general partner’s experience. To investigate the performance, I study the effect of experience on the successful divestment rate of the portfolio companies as well as different performance measure multiples that are commonly used in private equity research. The central findings of the study imply that the managers’ experience correlates highly with fund returns particularly as for venture capital. The same relationship is observable for buyout funds, as well, but not to the same extent. I also find a negative correlation between the fund size and the performance as for VC funds.Description
Thesis advisor
Önal, BunyaminKeywords
private equity, performance, manager experience, fund sequence