| Authors |
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| Publication date |
2009
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| Journal |
The Review of Financial Studies
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| Volume | Issue number |
22 | 4
|
| Pages (from-to) |
1747-1776
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| Number of pages |
30
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| Organisations |
-
Faculty of Economics and Business (FEB) - Amsterdam Business School Research Institute (ABS-RI)
|
| Abstract |
The performance of private equity funds as reported by industry associations and previous research is overstated. A large part of performance is driven by inflated accounting valuation of ongoing investments and we find a bias toward better performing funds in the data. We find an average net-of-fees fund performance of 3% per year below that of the S&P 500. Adjusting for risk brings the underperformance to 6% per year. We estimate fees to be 6% per year. We discuss several misleading aspects of performance reporting and some side benefits as a first step toward an explanation.
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| Document type |
Article
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| Published at |
https://doi.org/10.1093/rfs/hhn014
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