Are Too Many Private Equity Funds Top Quartile?

15 Pages Posted: 26 Dec 2012

See all articles by Robert S. Harris

Robert S. Harris

University of Virginia - Darden School of Business

Rüdiger Stucke

Warburg Pincus; University of Oxford

Date Written: Fall 2012


Assessing investment performance for private equity is inherently difficult due in large part to the nature of illiquid assets. Compounding this problem, investors and researchers alike are bedeviled by the existing lack of comprehensive, high‐quality data. The current state of affairs obscures answers to basic practical questions, leads to lack of standardization, and creates confusion. This paper examines measurements of “top quartile” performance, a status widely prized in the industry, especially in light of past research showing return persistence by funds raised by the same general partner. Using three popular data sources and applying metrics typically adopted in the industry, the authors demonstrate that even modest variations in methods can result in half of all funds being able to claim “top quartile” results. Sources of variation include methods of categorizing funds, definitions of vintage year, choice of the data source, specification of performance metrics, and treatment of geography and currencies.

Suggested Citation

Harris, Robert S. and Stucke, Rüdiger, Are Too Many Private Equity Funds Top Quartile? (Fall 2012). Journal of Applied Corporate Finance, Vol. 24, Issue 4, pp. 77-89, 2012, Available at SSRN: or

Robert S. Harris

University of Virginia - Darden School of Business ( email )

P.O. Box 6550
Charlottesville, VA 22906-6550
United States
434-924-4823 (Phone)
434-924-4859 (Fax)


Rüdiger Stucke

Warburg Pincus ( email )

450 Lexington Ave
New York, NY 10017
United States

University of Oxford ( email )

Park End Street
Oxford, OX1 1HP
Great Britain

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