How Persistent is Private Equity Performance? Evidence from Deal-Level Data

42 Pages Posted: 23 Aug 2013 Last revised: 23 Jan 2018

See all articles by Reiner Braun

Reiner Braun

Technische Universität München (TUM) - TUM School of Management

Tim Jenkinson

University of Oxford - Said Business School; European Corporate Governance Institute (ECGI)

Ingo Stoff

Technische Universität München (TUM) - Center for Entrepreneurial and Financial Studies

Date Written: December 21, 2015

Abstract

The persistence of returns is a critical issue for investors in their choice of private equity managers. In this paper we analyse buyout performance persistence in new ways, using a unique database containing cash-flow data on 13,523 portfolio company investments by 865 buyout funds. We focus on unique realized deals and find that persistence of fund managers has substantially declined as the private equity sector has matured and become more competitive. Private equity has, therefore, largely conformed to the pattern found in most other asset classes in which past performance is a poor predictor of the future.

Keywords: private equity, returns, persistence, portfolio companies

JEL Classification: G11, G20

Suggested Citation

Braun, Reiner and Jenkinson, Tim and Stoff, Ingo, How Persistent is Private Equity Performance? Evidence from Deal-Level Data (December 21, 2015). Available at SSRN: https://ssrn.com/abstract=2314400 or http://dx.doi.org/10.2139/ssrn.2314400

Reiner Braun (Contact Author)

Technische Universität München (TUM) - TUM School of Management ( email )

Arcisstr. 21
Munich, Deutschland 80333
Germany
+498928925181 (Phone)
+498928925188 (Fax)

HOME PAGE: http://www.ef.wi.tum.de/

Tim Jenkinson

University of Oxford - Said Business School ( email )

Park End Street
Oxford, OX1 1HP
United Kingdom
+44 1865 288916 (Phone)
+44 1865 288831 (Fax)

HOME PAGE: http://www.sbs.oxford.edu/timjenkinson

European Corporate Governance Institute (ECGI)

c/o ECARES ULB CP 114
B-1050 Brussels
Belgium

HOME PAGE: http://www.ecgi.org

Ingo Stoff

Technische Universität München (TUM) - Center for Entrepreneurial and Financial Studies ( email )

Arcisstraße 21
München, 80333
Germany

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