Measuring Institutional Investors’ Skill at Making Private Equity Investments

Daniel R. Cavagnaro · Berk A. Sensoy · Yingdi Wang · Michael S. Weisbach

65 citations0/0 files storedThe Journal of Finance

No readable copy stored yet — this record is metadata only.

No open-access location is known for this record yet.

Literature note Cite in a project Citation map

Private Equity and Venture Capital Financial Markets and Investment Strategies Corporate Finance and Governance

Abstract

ABSTRACT Using a large sample of institutional investors’ investments in private equity funds raised between 1991 and 2011, we estimate the extent to which investors’ skill affects their returns. Bootstrap analyses show that the variance of actual performance is higher than would be expected by chance, suggesting that some investors consistently outperform. Extending the Bayesian approach of Korteweg and Sorensen, we estimate that a one‐standard‐deviation increase in skill leads to an increase in annual returns of between one and two percentage points. These results are stronger in the earlier part of the sample period and for venture funds.

Paper brief

Loading…

Cite this work

Citation unavailable for this work.

BibTeX RIS CSL-JSON

No public copy is stored for this record, so only the metadata is cited.

Citations in this library

Citation map →

Stored only when both papers are in the corpus — 65 citations exist upstream.

References

1968THE PERFORMANCE OF MUTUAL FUNDS IN THE PERIOD 1945–1964 2004Mutual Fund Flows and Performance in Rational Markets 2005Private Equity Performance: Returns, Persistence, and Capital Flows 2002Mutual fund performance and seemingly unrelated assets 2007Smart Institutions, Foolish Choices: The Limited Partner Performance Puzzle 2002Investing in equity mutual funds 2006Investing in mutual funds when returns are predictable☆2001Should Investors Avoid All Actively Managed Mutual Funds? A Study in Bayesian Performance Evaluation

Cited by

2021The Return Expectations of Public Pension Funds 2017The Return Expectations of Institutional Investors 2022A Theory of Liquidity in Private Equity 2022Empirical Research on Private Equity Funds: A Review of the Past Decade and Future Research Opportunities 2022Risk-Adjusted Returns of Private Equity Funds: A New Approach

Explore the map →

Papers that cite the same references — the relational fallback while embeddings are still backfilling.

Imported from OpenAlex (CC0) — nothing here is generated.