Abstract

https://ssrn.com/abstract=2271690
 
 

Citations (4)



 


 



Do Private Equity Funds Manipulate Reported Returns?


Gregory W. Brown


University of North Carolina (UNC) at Chapel Hill - Finance Area

Oleg Gredil


Tulane University - Finance Area

Steven N. Kaplan


University of Chicago - Booth School of Business; National Bureau of Economic Research (NBER)

August 1, 2016

Fama-Miller Working Paper

Abstract:     
Private equity funds hold assets that are hard to value. Managers may have an incentive to distort reported valuations if these are used by investors to decide on commitments to subsequent funds managed by the same firm. Using a large dataset of buyout and venture funds, we test for the presence of reported return manipulation. We find evidence that some under-performing managers boost reported returns during times when fundraising takes place. However, those managers are unlikely to raise a next fund, suggesting that investors see through much of the manipulation. In contrast, we find that top-performing funds likely understate their valuations.

Number of Pages in PDF File: 70

Keywords: Private Equity, Venture Capital, Buyout Funds Mutual Funds, Institutional Investors

JEL Classification: G23, G24, G30


Open PDF in Browser Download This Paper

Date posted: May 30, 2013 ; Last revised: August 12, 2016

Suggested Citation

Brown, Gregory W. and Gredil, Oleg and Kaplan, Steven N., Do Private Equity Funds Manipulate Reported Returns? (August 1, 2016). Fama-Miller Working Paper. Available at SSRN: https://ssrn.com/abstract=2271690 or http://dx.doi.org/10.2139/ssrn.2271690

Contact Information

Gregory W. Brown (Contact Author)
University of North Carolina (UNC) at Chapel Hill - Finance Area ( email )
Kenan-Flagler Business School
Chapel Hill, NC 27599-3490
United States

Oleg Gredil
Tulane University - Finance Area ( email )
7 McAlister Dr
New Orleans, LA 70118
United States

Steven Neil Kaplan
University of Chicago - Booth School of Business ( email )
5807 S. Woodlawn Avenue
Chicago, IL 60637
United States
773-702-4513 (Phone)
773-702-0458 (Fax)

Chicago Booth School of Business Logo

National Bureau of Economic Research (NBER)
1050 Massachusetts Avenue
Cambridge, MA 02138
United States
Feedback to SSRN


Paper statistics
Abstract Views: 5,604
Downloads: 1,471
Download Rank: 8,799
Citations:  4