Abstract

http://ssrn.com/abstract=2159229
 
 

Citations (2)



 


 



The Disintermediation of Financial Markets: Direct Investing in Private Equity


Lily H. Fang


INSEAD - Finance

Victoria Ivashina


Harvard University; National Bureau of Economic Research (NBER)

Josh Lerner


Harvard Business School - Finance Unit; Harvard University - Entrepreneurial Management Unit; National Bureau of Economic Research (NBER)

September 3, 2014

Journal of Financial Economics (JFE), Forthcoming

Abstract:     
We examine twenty years of direct private equity investments by seven large institutions. These direct investments perform better than public market indices, especially buyout investments and those made in the 1990s. Outperformance by the direct investments, however, relative to the corresponding private equity fund benchmarks is limited and concentrated among buyout transactions. Co-investments underperform the corresponding funds with which they co-invest, due to an apparent adverse selection of transactions available to these investors, while solo transactions outperform fund benchmarks. Investors’ ability to resolve information problems appears to be an important driver of solo deal outcomes.

Number of Pages in PDF File: 49

Keywords: Financial Intermediation, Private Equity, Direct Investment, Co-investment

JEL Classification: G20, G23

Accepted Paper Series





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Date posted: October 9, 2012 ; Last revised: September 5, 2014

Suggested Citation

Fang, Lily H. and Ivashina, Victoria and Lerner, Josh, The Disintermediation of Financial Markets: Direct Investing in Private Equity (September 3, 2014). Journal of Financial Economics (JFE), Forthcoming. Available at SSRN: http://ssrn.com/abstract=2159229 or http://dx.doi.org/10.2139/ssrn.2159229

Contact Information

Lily H. Fang
INSEAD - Finance ( email )
Boulevard de Constance
F-77305 Fontainebleau Cedex
France
Victoria Ivashina (Contact Author)
Harvard University ( email )
Harvard Business School
Baker Library 233
Boston, MA 02163
United States
National Bureau of Economic Research (NBER) ( email )
1050 Massachusetts Avenue
Cambridge, MA 02138
United States
Josh Lerner
Harvard Business School - Finance Unit ( email )
Boston, MA 02163
United States
617-495-6065 (Phone)
617-496-7357 (Fax)
HOME PAGE: http://www.people.hbs.edu/jlerner/
Harvard University - Entrepreneurial Management Unit
Cambridge, MA 02163
United States
National Bureau of Economic Research (NBER)
1050 Massachusetts Avenue
Cambridge, MA 02138
United States
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