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

M. Da Rin, L. Phalippou

Research output: Working paperDiscussion paperOther research output

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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
PublisherFinance
Number of pages57
Volume2014-016
Publication statusPublished - 2014

Publication series

NameCentER Discussion Paper
Volume2014-016

Fingerprint

Private equity
Investors
Radical change
Prestige
Investment criteria
Institutional investors
Alternative assets
Long-term relationships
Investment process
Assets
Black box
Due diligence

Keywords

  • Institutional Investors
  • Investor Heterogeneity
  • Due Diligence Private Equity

Cite this

Da Rin, M., & Phalippou, L. (2014). There is Something Special About Large Investors: Evidence From a Survey of Private Equity Limited Partners. (CentER Discussion Paper; Vol. 2014-016). Tilburg: Finance.
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Da Rin, M & Phalippou, L 2014 'There is Something Special About Large Investors: Evidence From a Survey of Private Equity Limited Partners' CentER Discussion Paper, vol. 2014-016, Finance, Tilburg.

There is Something Special About Large Investors : Evidence From a Survey of Private Equity Limited Partners. / Da Rin, M.; Phalippou, L.

Tilburg : Finance, 2014. (CentER Discussion Paper; Vol. 2014-016).

Research output: Working paperDiscussion paperOther research output

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N2 - 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.

AB - 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.

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