Can investors time their exposure to private equity?

Gregory Brown, Robert Harris, Wendy Hu, Tim Jenkinson, Steven N. Kaplan and David Robinson

Journal of Financial Economics, 2021, vol. 139, issue 2, 561-577

Abstract: Private equity performance, both for buyouts and venture capital, has been highly cyclical: periods of high fundraising have been followed by periods of low performance. Despite this seemingly predictable variation, we find modest gains, at best, to pursuing realistic, investable strategies that time capital commitments to private equity. This occurs, in part, because investors can only time their commitments to funds; they cannot time when commitments are called or when investments are exited. There is a high degree of time-series correlation in net cash flows even across commitment strategies that allocate capital in a very different manner over time.

Keywords: Private equity; Buyouts; Venture capital; Market timing (search for similar items in EconPapers)
JEL-codes: G1 G2 G4 (search for similar items in EconPapers)
Date: 2021
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (2)

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Working Paper: Can Investors Time Their Exposure to Private Equity? (2020)
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Persistent link: https://EconPapers.repec.org/RePEc:eee:jfinec:v:139:y:2021:i:2:p:561-577

DOI: 10.1016/j.jfineco.2020.08.014

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