Titre
The Risk and Performance of Listed Private Equity
Type
article
Institution
UNIL/CHUV/Unisanté + institutions partenaires
Périodique
Auteur(s)
Kurtović, Hrvoje
Auteure/Auteur
Markarian, Garen
Auteure/Auteur
Breuer, Patrick
Co-dernière auteure/Co-dernier auteur
Liens vers les personnes
Liens vers les unités
Statut éditorial
Publié
Date de publication
2023-05-22
Volume
26
Numéro
1
Première page
77
Dernière page/numéro d’article
94
Peer-reviewed
Oui
Langue
anglais
Résumé
Private equity (PE) risk and performance is a black box for investors, as information is quasi-private during a fund’s life. To overcome this issue, the authors use the universe of listed PEs (LPEs) in US exchanges, which permits the measurement of financial fundamentals based on audited quarterly reports, and the observation of share price performance and volatility on a real-time basis. They first show that LPE performance and valuations are highly correlated to that of unlisted PEs, and hence are a good proxy. LPEs constantly exhibit leverage double that of the broader market while showing no distinctive share price performance. Controlling for standard determinants of returns, LPE firms do not outperform market benchmarks. Using COVID-19 as an exogenous increase in tail risk, PE firms grossly underperformed as markets penalized the riskiness and lack of transparency inherent in PE investments. The problems are likely greater in privately held PEs, where performance is self-reported, not audited, and illiquidity periods last up to 10 or 12 years.
PID Serval
serval:BIB_918A906A5288
Date de création
2023-05-17T16:23:13.666Z
Date de création dans IRIS
2025-05-21T01:14:47Z