The performance of private equity funds

Phalippou, Ludovic and Gottschalg, Oliver (2009) The performance of private equity funds. Review of Financial Studies, 22 (4). pp. 1747-1776.


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.

Item Type: Article
Keywords: Private equity funds; Performance; finance
Subject(s): Finance
Date Deposited: 30 May 2012 09:05
Last Modified: 21 Sep 2018 12:19
Funders: N/A

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