Performance in Private Equity: Why are General Partnerships’ Owners Important?

35 Pages Posted: 30 Mar 2011

See all articles by Stefano Caselli

Stefano Caselli

Bocconi University - Department of Finance

Stefano Gatti

Bocconi University - Department of Finance

Francesca Querci

Università degli Studi di Genova

Date Written: March 1, 2010

Abstract

Our study shows that the ownership of private equity funds influences the investments’ performances. Our analysis focuses on the universe of PE investments, made by Italian closed-end funds, from 1999 to 2005. We find that bank-owned funds are able to carry into effect a weaker monitoring of the companies in which they invest, because their representatives hold a plurality of offices in boards of directors of firms, either PE-backed or not. This leads to lower revenue growth of portfolio companies and consequently to lower IRR. On the contrary, corporate-owned funds are able to realize a closer supervision of their investments, realizing better performances.

Keywords: private equity, performance, ownership

JEL Classification: G24

Suggested Citation

Caselli, Stefano and Gatti, Stefano and Querci, Francesca, Performance in Private Equity: Why are General Partnerships’ Owners Important? (March 1, 2010). CAREFIN Research Paper No. 05/2010, Available at SSRN: https://ssrn.com/abstract=1798612

Stefano Caselli (Contact Author)

Bocconi University - Department of Finance ( email )

Via Roentgen 1
Milano, MI 20136
Italy

Stefano Gatti

Bocconi University - Department of Finance ( email )

Via Roentgen 1
Milano, MI 20136
Italy

Francesca Querci

Università degli Studi di Genova ( email )

via Vivaldi 5
Genova, 16121
Italy

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