Listed Private Equity Funds: IPO Pricing, J-Curve and Learning Effects

Posted: 25 May 2009

Date Written: June 1, 2009


The economics of private equity investments have received an increasing attention by finance scholars in latest years. However, the academic research has so far devoted scant attention to listed private equity funds. These funds are a potentially fruitful research field to test some of the hypotheses about performance and returns of private equity investments as an asset class. We study a sample of international private equity investors, focusing on their share performance. Interestingly, the IPOs of these funds appear overpriced while the performance pattern over time confirms a J-curve trend. Then, we perform an event-study of 225 announcements of investments made by the listed private equity funds included in our sample. In contrast with the well documented negative market reaction at companies announcing acquisitions, the average market reaction at the announcements is positive (1,09%) for listed private equity investors. The abnormal returns identified also allow to test the learning effect hypotheses in relation with the investment activities performed by funds. We are able to show that the learning effect does not hold and that each investment is evaluated in isolation.

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Keywords: private equity, IPO pricing, event study, NAV, J-curve effect, learning processes

JEL Classification: G12, G14, G24, G34

Suggested Citation

Gianfrate, Gianfranco, Listed Private Equity Funds: IPO Pricing, J-Curve and Learning Effects (June 1, 2009). CAREFIN Research Paper No. 10/09, Available at SSRN:

Gianfranco Gianfrate (Contact Author)

EDHEC Business School ( email )

58 rue du Port
Lille, 59046

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