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Private equity characteristics and performance: An analysis of North American venture capital and buyout funds
Author(s) -
Roggi Oliviero,
Giannozzi Alessandro,
Baglioni Tommaso,
Pagliai Francesco
Publication year - 2019
Publication title -
economic notes
Language(s) - English
Resource type - Journals
SCImago Journal Rank - 0.274
H-Index - 19
eISSN - 1468-0300
pISSN - 0391-5026
DOI - 10.1111/ecno.12128
Subject(s) - income fund , venture capital , fund of funds , private equity , business , closed end fund , open end fund , sovereign wealth fund , private equity fund , private equity firm , investment fund , finance , economics , fund administration , institutional investor , microeconomics , market liquidity , corporate governance , incentive
Abstract The paper investigates the relationship between fund performance and fund characteristics of North American private equity (PE) funds, by analyzing the interactions of fund size, fund sequence, and past fund performance on traditional fund return measures. The empirical evidence is based on both linear and polynomial regressions, on a sample of 345 venture capital (VC) and 411 buyout (BO) funds with vintage year over the period 1995–2010. We document a concave relationship between fund size and performance, persistence in PE performance, as well as a convex relationship between fund sequence and performance. We suggest both the optimal fund size and the optimal fund sequence number. Economic implications for investors and general partners are discussed as well.