Is U.S. Small Cap a Viable Alternative to U.S. Private Equity?

16 Pages Posted: 15 Jul 2009 Last revised: 1 Aug 2011

Date Written: April 2009

Abstract

A number of academic papers have indicated that returns for private equity funds, on average, have not outperformed public equities in the United States. This contradicts the risk premium one might expect with private equity, given the liquidity, transparency limitations, and additional origination costs associated with private equity investments.

In this paper, Brandes Institute Advisory Board member Bruce Grantier examines the academic research and historical performance (both on an asset class and manager value-added basis) to evaluate small cap as an alternative investment to private equity.

Keywords: private equity, small cap, U.S. small cap, Brandes, Brandes Institute, Bruce Grantier

JEL Classification: G24, G23

Suggested Citation

Grantier, Bruce, Is U.S. Small Cap a Viable Alternative to U.S. Private Equity? (April 2009). Brandes Institute Research Paper No. 2009-02, Available at SSRN: https://ssrn.com/abstract=1392874 or http://dx.doi.org/10.2139/ssrn.1392874

Bruce Grantier (Contact Author)

Brandes Institute

11988 El Camino Real, Suite 500
P.O. Box 919048
San Diego, CA 92191-9048
United States

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