Limited partner performance and the maturing of the private equity industry

Berk A. Sensoy, Yingdi Wang and Michael Weisbach

Journal of Financial Economics, 2014, vol. 112, issue 3, 320-343

Abstract: We evaluate the performance of limited partners׳ (LPs׳) private equity investments over time. Using a sample of 14,380 investments by 1,852 LPs in 1,250 buyout and venture capital funds started between 1991 and 2006, we find that the superior performance of endowment investors in the 1991–1998 period, documented by prior literature, is mostly due to their greater access to the top-performing venture capital partnerships. In the subsequent 1999–2006 period, endowments no longer outperform, no longer have greater access to funds that are likely to restrict access, and do not make better investment selections than other types of institutional investors. Nevertheless, all investor types׳ private equity investments continue to outperform public markets on average. We discuss how these results are consistent with the general maturing of the industry, as private equity has transitioned from a niche, poorly understood area to a ubiquitous part of institutional investors׳ portfolios.

Keywords: Private equity performance; Institutional investors (search for similar items in EconPapers)
JEL-codes: G11 G23 G24 (search for similar items in EconPapers)
Date: 2014
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (34)

Downloads: (external link)
http://www.sciencedirect.com/science/article/pii/S0304405X14000245
Full text for ScienceDirect subscribers only

Related works:
Working Paper: Limited Partner Performance and the Maturing of the Private Equity Industry (2013)
Working Paper: Limited Partner Performance and the Maturing of the Private Equity Industry (2013)
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:eee:jfinec:v:112:y:2014:i:3:p:320-343

DOI: 10.1016/j.jfineco.2014.02.006

Access Statistics for this article

Journal of Financial Economics is currently edited by G. William Schwert

More articles in Journal of Financial Economics from Elsevier
Bibliographic data for series maintained by Catherine Liu ().