Is destiny worth the Distance? On Private Equity in Emerging Markets

Sara Ain Tommar, Serge Darolles and E. Jurzcenko
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Sara Ain Tommar: DRM - Dauphine Recherches en Management - Université Paris Dauphine-PSL - PSL - Université Paris Sciences et Lettres - CNRS - Centre National de la Recherche Scientifique
Serge Darolles: DRM - Dauphine Recherches en Management - Université Paris Dauphine-PSL - PSL - Université Paris Sciences et Lettres - CNRS - Centre National de la Recherche Scientifique

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Abstract: We study the performance determinants of private equity investing in emerging markets (EM) compared todeveloped markets (DM) using a novel dataset. Using a multilevel linear model specification, our resultssuggest that performance in emerging markets in highly dependent on geographical and cultural proximity.The effect is significantly higher for GPs investing in both markets compared to pure DM- and EM-players respectively. Cross-cultural and geographical effects are enhanced when the GP investment teams are alsoculturally close using different measures. Our results also show that the realized returns are highly dependenton the investment period, the investment style and the GP's experience on each market.

Keywords: Private Equity investing; Private equity performance; Emerging Markets (search for similar items in EconPapers)
Date: 2018-11-23
Note: View the original document on HAL open archive server: https://hal.science/hal-04010167v1
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Published in 3rd International Bordeaux Workshop in Quantitative Finance, Risk, and Decision Theor, Nov 2018, Bordeaux, France

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