Strategic Valuation Management in Private Equity Fundraising

65 Pages Posted: 10 May 2017

See all articles by Carsten Bienz

Carsten Bienz

Norwegian School of Economics (NHH)

Charlotte Wallem Rakner

PwC Norway

Anne Therese Rasmussen

Ernst & Young Norway

Date Written: May 10, 2017


This paper investigates the effect of fundraising events on private equity funds self-reported valuations of existing portfolio companies. In the typical private equity fund structure, the general partners (GP) of the funds have both the incentives and the ability to manage their current fund’s track record in order to facilitate fundraising. We show that GPs actively use this ability to manage the valuations of their portfolio companies in practice. For this purpose, we construct a unique dataset containing quarterly valuations for the portfolio companies of a sample of Nordic GPs. Using a matching approach with double treatment, we isolate the fundraising specific valuation effect for Norwegian portfolio companies. We find that this effect materialises through a particular valuation pattern where unrealised returns are shifted in time in order to enable a boost in returns during the run-up to fundraising. This pattern cannot be explained by underlying (good) firm performance.

Keywords: Private Equity, Valuation Management, Fundraising

JEL Classification: G24, M41

Suggested Citation

Bienz, Carsten and Rakner, Charlotte and Rasmussen, Anne Therese, Strategic Valuation Management in Private Equity Fundraising (May 10, 2017). Available at SSRN: or

Carsten Bienz (Contact Author)

Norwegian School of Economics (NHH) ( email )

Helleveien 30

Charlotte Rakner

PwC Norway ( email )

Dronning Eufemias gate 8
Oslo, 0191

Anne Therese Rasmussen

Ernst & Young Norway ( email )


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