|
|
|
|
||||
|
||||
The Economics of Private Equity FundsAndrew MetrickYale School of Management; National Bureau of Economic Research (NBER) Ayako YasudaUniversity of California, Davis - Graduate School of Management June 9, 2009 Review of Financial Studies, Vol. 23, pp. 2303-2341 Swedish Institute for Financial Research Conference on The Economics of the Private Equity Market Abstract: This paper analyzes the economics of the private equity industry using a novel model and dataset. We obtain data from a large investor in private equity funds, with detailed records on 238 funds raised between 1993 and 2006. We build a model to estimate the expected revenue to managers as a function of their investor contracts, and we test how this estimated revenue varies across the characteristics of our sample funds. Among our sample funds, about two-thirds of expected revenue comes from fixed-revenue components that are not sensitive to performance. We find sharp differences between venture capital (VC) and buyout (BO) funds. BO managers build on their prior experience by increasing the size of their funds faster than VC managers do. This leads to significantly higher revenue per partner and per professional in later BO funds. The results suggest that the BO business is more scalable than the VC business, and that past success has a differential impact on the terms of their future funds.
Number of Pages in PDF File: 57 Keywords: private equity, venture capital, fund managers JEL Classification: G1, G2 Accepted Paper SeriesDate posted: June 27, 2007 ; Last revised: August 3, 2010Suggested CitationContact Information
|
|
|||||||||||||||||||||||||||||||
© 2013 Social Science Electronic Publishing, Inc. All Rights Reserved.
FAQ
Terms of Use
Privacy Policy
Copyright
This page was processed by apollo1 in 0.563 seconds
