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Private Equity Performance: A Survey

Charles A. Dice Center Working Paper No. 2015-10

Fisher College of Business Working Paper No. 2015-03-10

34 Pages Posted: 8 Jul 2015 Last revised: 15 Aug 2015

Steven N. Kaplan

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

Berk A. Sensoy

Vanderbilt University - Finance

Multiple version iconThere are 2 versions of this paper

Date Written: October 15, 2014

Abstract

We survey the literature on private equity performance, focusing on venture capital and buyout funds rather than portfolio companies. We describe recent findings on performance measures, average fund returns, risk adjustments, cyclicality and liquidity, persistence, interim returns and self-reported net asset values, the performance of different types of investors in funds, and the links between management contracts and fund returns. Buyout funds have outperformed the S&P 500 net of fees on average by about 20% over the life of the fund. Venture capital funds raised in the 1990s outperformed the S&P 500 while those raised in the 2000s underperformed. The results are consistent across a number of datasets and papers. Before the 2000s, buyout and venture capital fund performance showed strong evidence of persistence. Since 2000, buyout fund persistence has declined, while venture capital fund persistence has remained equally strong.

Keywords: private equity, performance

JEL Classification: G11, G12, G23, G24

Suggested Citation

Kaplan, Steven N. and Sensoy, Berk A., Private Equity Performance: A Survey (October 15, 2014). Charles A. Dice Center Working Paper No. 2015-10 ; Fisher College of Business Working Paper No. 2015-03-10. Available at SSRN: https://ssrn.com/abstract=2627312 or http://dx.doi.org/10.2139/ssrn.2627312

Steven 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)

National Bureau of Economic Research (NBER)

1050 Massachusetts Avenue
Cambridge, MA 02138
United States

Berk Sensoy (Contact Author)

Vanderbilt University - Finance ( email )

401 21st Avenue South
Nashville, TN 37203
United States

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