The performance of private equity funds
| Authors |
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|---|---|
| Publication date | 2009 |
| Journal | The Review of Financial Studies |
| Volume | Issue number | 22 | 4 |
| Pages (from-to) | 1747-1776 |
| Number of pages | 30 |
| Organisations |
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| Abstract |
The performance of private equity funds as reported by industry associations and previous research is overstated. A large part of performance is driven by inflated accounting valuation of ongoing investments and we find a bias toward better performing funds in the data. We find an average net-of-fees fund performance of 3% per year below that of the S&P 500. Adjusting for risk brings the underperformance to 6% per year. We estimate fees to be 6% per year. We discuss several misleading aspects of performance reporting and some side benefits as a first step toward an explanation. |
| Document type | Article |
| Published at |
https://doi.org/10.1093/rfs/hhn014
(Final published version)
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