Performance of Buyout Funds Revisited?* | Zendy

Ludovic Phalippou | Zendy

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Performance of Buyout Funds Revisited?*

Author(s) -

Ludovic Phalippou

Publication year - 2013

Publication title -

european finance review

Language(s) - English

Resource type - Journals

SCImago Journal Rank - 4.933

H-Index - 61

eISSN - 1573-692X

pISSN - 1382-6662

DOI - 10.1093/rof/rft002

Subject(s) - leveraged buyout , business , benchmark (surveying) , value (mathematics) , index fund , replicate , finance , open end fund , institutional investor , mathematics , statistics , private equity , geodesy , geography , corporate governance

This article shows that publicly available data on buyout fund returns are sufficient to replicate the recent findings derived from superior but proprietary datasets. The average buyout fund outperforms the S&P 500. However, this study shows that buyout funds mainly invest in small and value companies; and the average buyout fund return is similar to that of small-cap indices and that of the oldest small-cap passive mutual fund (“DFA micro-cap”). If the benchmark is changed to small and value indices, and is levered up, the average buyout fund underperforms by 3.1% p.a

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