Information Asymmetries in Private Equity: Reporting Frequency, Endowments, and Governance
55 Pages Posted: 18 Mar 2014 Last revised: 11 Jun 2020
Date Written: March 25, 2014
Using PitchBook’s private equity (PE) database of 5,068 PE funds from 44 countries for the 2000-2012 period, we show that endowments are systematically associated with less pronounced differences between unrealized returns and subsequently realized returns. Moreover, endowments receive more frequent reports from their PE funds, implying more stringent governance. We find that higher reporting frequencies from PE funds are correlated with a lower tendency for the limited partners to receive overstated performance reports. These findings persist after controlling for stock market conditions, legal and accounting disclosure environments, legal origins, fund and GP characteristics, limited partnership types, as well as cultural dimensions.
Keywords: Private Equity, Endowments, Financial Reporting, Law and Governance, Culture, Venture Capital
JEL Classification: G22, G23, G24
Suggested Citation: Suggested Citation