How Implementation Style and Costs Affect Private Equity Performance

6 Pages Posted: 12 Jun 2014

See all articles by Alexander Beath

Alexander Beath

CEM Benchmarking Inc.

Chris Flynn

CEM Benchmarking Inc.

Jody MacIntosh

CEM Benchmarking Inc.

Date Written: May 23, 2014

Abstract

This article describes a study that analyzed the private equity performance and costs of large pension funds. Using data from the CEM Benchmarking Inc. (CEM) database, we establish that implementation style affects net performance: internal management outperforms external management, and external management outperforms funds of funds (FOF). Since the difference in net performance is due largely to cost, we examine the cost differential of various implementation styles as well as some of the challenges in understanding the true costs of investing in the private equity asset class.

Keywords: Benchmarking, Implementation Style, Investment Performance and Costs, Pension Fund

Suggested Citation

Beath, Alexander and Flynn, Chris and MacIntosh, Jody, How Implementation Style and Costs Affect Private Equity Performance (May 23, 2014). Rotman International Journal of Pension Management, Vol. 7, No. 1, 2014, Available at SSRN: https://ssrn.com/abstract=2449784

Alexander Beath (Contact Author)

CEM Benchmarking Inc. ( email )

80 Richmond Street West, Suite 1300
Toronto ON, M5H 2A4
Canada

Chris Flynn

CEM Benchmarking Inc. ( email )

80 Richmond Street West, Suite 1300
Toronto ON, M5H 2A4
Canada

Jody MacIntosh

CEM Benchmarking Inc. ( email )

80 Richmond Street West, Suite 1300
Toronto ON, M5H 2A4
Canada

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