Smart institutions, foolish choices?
Subtitle: the limited partner performance puzzle
By: Josh Lerner, Antoinette Schoar, Wan Wong.
Contributors: Schoar, Antoinette.; Wong, Wan.; National Bureau of Economic Research.
Series: NBER working paper series ;; working paper 11136; Working paper series (National Bureau of Economic Research : Online) ;; working paper no. 11136.
Publisher: National Bureau of Economic Research
Published: 2005
Place of publication: Cambridge, MA
Language: eng
Format: Electronic resource
Subjects: Institutional investments.; Limited partnership.; Rate of return.
Description: "The returns that institutional investors realize from private equity investments differ dramatically across institutions.  Using detailed and hitherto unexplored records of fund investors and performance, we document large heterogeneity in the performance of different classes of limited partners.  In particular, endowments' annual returns are nearly 14% greater than average.  Funds selected by investment advisors and banks lag sharply.  These results are robust to controlling for the type and year of the investment, as well as to the use of different specifications.  Analyses of reinvestment decisions and young funds suggest that the results are not primarily due to endowments' greater access to established funds.  Finally, we examine the differences in the choice of intermediaries across various institutional investors and their relationship to success.  We find that LPs that have higher average IRRs also tend to invest in older funds and have a smaller fraction of GPs in their geographic area, and that the performance of university endowments is correlated with measures of the quality and loyalty of the student body"--National Bureau of Economic Research web site.
Notes: Includes bibliographical references.
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Mode of access: World Wide Web.