Private equity performance around the world

Sara Ain Tommar, Serge Darolles and Emmanuel Jurczenko
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Sara Ain Tommar: NEOMA - Neoma Business School
Serge Darolles: DRM - Dauphine Recherches en Management - Université Paris Dauphine-PSL - PSL - Université Paris Sciences et Lettres - CNRS - Centre National de la Recherche Scientifique
Emmanuel Jurczenko: ESCP-EAP - ESCP-EAP - Ecole Supérieure de Commerce de Paris

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Abstract: We construct a novel dataset to explore the returns of private equity in international markets (i.e., other than North America). We investigate fund performance and persistence and compare the findings to the extensive evidence on North American funds. We find that both investment strategy and investment geography characterize the performance and return persistence of private equity. Buyout funds have the highest returns in Europe, while growth equity funds perform better in Asia-Pacific. Venture capital returns are modest across all international geographies. As documented in the literature for North America, large capital inflows result in lower returns in Europe, while this does not affect other investment geographies. We also find evidence of important market segmentation and strong return persistence for buyout and growth funds in Europe, as well as for a sample of globally diversified, US-sponsored buyout funds. We do not find evidence of persistence in Asia-Pacific or other world locations. Our results are robust to different performance measures and various tests for selection effects. They also hold important implications for both fund managers and investors targeting international markets.

Keywords: fund performance; international markets; private equity funds; return persistence (search for similar items in EconPapers)
Date: 2024
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Published in Financial Analysts Journal, 2024, 80 (2)

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Persistent link: https://EconPapers.repec.org/RePEc:hal:journl:hal-04590094

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