Resource title

Performance of private equity funds: another puzzle?

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Resource description

Using a novel and comprehensive database on the performance of US and EU private equity (PE) funds and their underlying investments, the authors find that the performance of PE funds is comparable to public market performance. The authors show how sensitive this result is to various assumptions and thereby reconcile existing divergent estimates. They find evidence consistent with the hypothesis derived by Jones and Rhodes-Kropf (2003), who show that idiosyncratic risk should be priced for PE funds. They also document that the performance of venture funds is more sensitive to business cycles while the performance of buyout funds is more sensitive to the state of both the bond and the stock market. Nonetheless, PE funds appear to offer some attractive hedging properties.

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en

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application/pdf

Resource resource URL

http://flora.insead.edu/fichiersti_wp/inseadwp2003/2003-93.pdf

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Copyright INSEAD. All rights reserved