The importance of size in private equity: Evidence from a survey of limited partners

Marco Da Rin, L. Phalippou

Research output: Contribution to journalArticleScientificpeer-review

Abstract

Using a comprehensive survey, we show that investors with a larger capital allocation to private equity are more specialized − measured by the degree to which the investor focuses on private equity rather than other classes of investments − and have a wider scope of due diligence and investment activities. Other investor characteristics (experience, type, location, compensation structure, number of funds under management) play no role. In particular, endowments are not special according to the survey measures. These results are consistent with the changing LP–GP relationship in private equity as capital is increasingly concentrated in the hands of large investors.
Original languageEnglish
Pages (from-to)64-76
JournalJournal of Financial Intermediation
Volume31
Early online date11 Jul 2016
DOIs
Publication statusPublished - Jul 2017

Fingerprint

Private equity
Investors
Capital allocation
Investment activity
Compensation structure
Endowments
Due diligence

Keywords

  • institutional investors
  • limited partners
  • investor heterogeneity
  • due dilligence
  • private equity

Cite this

@article{0f3b9256c1ab45c4a7b65361bd3c0262,
title = "The importance of size in private equity: Evidence from a survey of limited partners",
abstract = "Using a comprehensive survey, we show that investors with a larger capital allocation to private equity are more specialized − measured by the degree to which the investor focuses on private equity rather than other classes of investments − and have a wider scope of due diligence and investment activities. Other investor characteristics (experience, type, location, compensation structure, number of funds under management) play no role. In particular, endowments are not special according to the survey measures. These results are consistent with the changing LP–GP relationship in private equity as capital is increasingly concentrated in the hands of large investors.",
keywords = "institutional investors, limited partners, investor heterogeneity, due dilligence, private equity",
author = "{Da Rin}, Marco and L. Phalippou",
year = "2017",
month = "7",
doi = "10.1016/j.jfi.2016.07.001",
language = "English",
volume = "31",
pages = "64--76",
journal = "Journal of Financial Intermediation",
issn = "1042-9573",
publisher = "Academic Press Inc.",

}

The importance of size in private equity : Evidence from a survey of limited partners. / Da Rin, Marco; Phalippou, L.

In: Journal of Financial Intermediation, Vol. 31, 07.2017, p. 64-76.

Research output: Contribution to journalArticleScientificpeer-review

TY - JOUR

T1 - The importance of size in private equity

T2 - Evidence from a survey of limited partners

AU - Da Rin, Marco

AU - Phalippou, L.

PY - 2017/7

Y1 - 2017/7

N2 - Using a comprehensive survey, we show that investors with a larger capital allocation to private equity are more specialized − measured by the degree to which the investor focuses on private equity rather than other classes of investments − and have a wider scope of due diligence and investment activities. Other investor characteristics (experience, type, location, compensation structure, number of funds under management) play no role. In particular, endowments are not special according to the survey measures. These results are consistent with the changing LP–GP relationship in private equity as capital is increasingly concentrated in the hands of large investors.

AB - Using a comprehensive survey, we show that investors with a larger capital allocation to private equity are more specialized − measured by the degree to which the investor focuses on private equity rather than other classes of investments − and have a wider scope of due diligence and investment activities. Other investor characteristics (experience, type, location, compensation structure, number of funds under management) play no role. In particular, endowments are not special according to the survey measures. These results are consistent with the changing LP–GP relationship in private equity as capital is increasingly concentrated in the hands of large investors.

KW - institutional investors

KW - limited partners

KW - investor heterogeneity

KW - due dilligence

KW - private equity

U2 - 10.1016/j.jfi.2016.07.001

DO - 10.1016/j.jfi.2016.07.001

M3 - Article

VL - 31

SP - 64

EP - 76

JO - Journal of Financial Intermediation

JF - Journal of Financial Intermediation

SN - 1042-9573

ER -