Market-Based Private Equity Returns

55 Pages Posted: 30 May 2019 Last revised: 20 Feb 2020

See all articles by Theodosis L. Kallenos

Theodosis L. Kallenos

University of Cyprus-School of Economics and Management- Department of Accounting and Finance

George Nishiotis

University of Cyprus-Faculty of Economics and Management-Department of Accounting and Finance

Date Written: February 20, 2020

Abstract

Using the universe of Business Development Companies (BDCs), a unique publicly traded segment of U.S. Private Equity (PE), for the period 1998-2017 we provide the first in depth examination of their performance and risk adjusted characteristics. More importantly, we show that the readily available BDC market returns explain the cash flow based proxies of traditional PE fund returns over and above other traded factors. Our findings highlight the importance of BDCs in providing public access to the PE asset class and a readily available market-based benchmark for evaluating both traditional PE investments and transaction based proxies of PE market returns.

Keywords: Business Development Companies, Private Equity, Risk-Return Characteristics, Market-based Performance Measures, Appraisal-based Performance Measures

JEL Classification: G23, G24, G12, G14

Suggested Citation

Kallenos, Theodosis L. and Nishiotis, George P., Market-Based Private Equity Returns (February 20, 2020). Available at SSRN: https://ssrn.com/abstract=3383461 or http://dx.doi.org/10.2139/ssrn.3383461

Theodosis L. Kallenos

University of Cyprus-School of Economics and Management- Department of Accounting and Finance ( email )

1 University Avenue
P.O. Box 20537
Nicosia, CY-1678
Cyprus
+35722893628 (Phone)
+35722895475 (Fax)

George P. Nishiotis (Contact Author)

University of Cyprus-Faculty of Economics and Management-Department of Accounting and Finance ( email )

Cyprus

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