Private Equity Returns and Disclosure Around the World

Cumming, Douglas J.; Walz, Uwe

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Private Equity Returns and Disclosure Around the World

Journal of International Business Studies, 2009

EFA 2004 MAASTRICHT

European Economic Association (EEA), 2004

43 Pages Posted: 6 Apr 2009 Last revised: 15 Apr 2009

See all articles by Douglas J. Cumming

Uwe Walz

Goethe University Frankfurt - Institute of Economics; Center For Financial Studies (CFS); Leibniz Institute for Financial Research SAFE

There are 2 versions of this paper

Date Written: March 30, 2004

Abstract

To obtain more funds from the institutional investors, private equity fund managers may report inflated valuations of private investee companies that are not yet sold. However, such overvaluations may result in a reputational cost when those investments are realized. Using evidence from 39 countries, we show that there are significant systematic biases in managers' reporting of fund performance. We find that these biases depend on the accounting and legal environment in a country, and on proxies for the degree of information asymmetry between institutional investors and private equity fund managers.

Keywords: International Financial Reporting, Private Equity and Portfolio Diversification, Venture Capital

JEL Classification: G24, G28, G31, G32, G35

Suggested Citation: Suggested Citation

Cumming, Douglas J. and Walz, Uwe, Private Equity Returns and Disclosure Around the World (March 30, 2004). Journal of International Business Studies, 2009, EFA 2004 MAASTRICHT, European Economic Association (EEA), 2004, Available at SSRN: https://ssrn.com/abstract=1370726