There is Something Special About Large Investors: Evidence From a Survey of Private Equity Limited Partners

M. Da Rin, L. Phalippou

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Abstract

Abstract: We show that investors with more dollar amount allocated to private equity conduct more thorough due diligence and have different investment criteria. The fraction allocated to private equity, the organization’s total asset under management, and other investor characteristics that broadly capture prestige, experience, and long-term relationship do not explain these differences in effort and beliefs. We also document several novel facts that contribute to opening the blackbox of the investment process in alternative asset classes. An implication of our results is that the emergence of gigantic institutional investors may come with a radical change in the beliefs and actions of the marginal investor.
Original languageEnglish
Place of PublicationTilburg
PublisherTILEC
Number of pages57
Volume2014-010
Publication statusPublished - 2014

Publication series

NameTILEC Discussion Paper
Volume2014-010

Keywords

  • Institutional Investors
  • Investor Heterogeneity
  • Due Diligence Private Equity

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