Financial Intermediation in Private Equity: How Well Do Funds of Funds Perform?

Robert S. Harris, Tim Jenkinson, Steven Kaplan () and Ruediger Stucke

No 23428, NBER Working Papers from National Bureau of Economic Research, Inc

Abstract: This paper focuses on funds of funds (FOFs) as a form of financial intermediation in private equity (both buyout and venture capital). After accounting for fees, FOFs provide returns equal to or above public market indices for both buyout and venture capital. While FOFs focusing on buyouts outperform public markets, they underperform direct fund investment strategies in buyout. In contrast, the average performance of FOFs in venture capital is on a par with results from direct venture fund investing. This suggests that FOFs in venture capital (but not in buyouts) are able to identify and access superior performing funds.

JEL-codes: G20 G23 (search for similar items in EconPapers)
Date: 2017-05
New Economics Papers: this item is included in nep-dcm
Note: CF
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Published as Robert S. Harris & Tim Jenkinson & Steven N. Kaplan & Ruediger Stucke, 2018. "Financial Intermediation in Private Equity: How Well Do Funds of Funds Perform?," Journal of Financial Economics, .

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Journal Article: Financial intermediation in private equity: How well do funds of funds perform? (2018)
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