Interim fund performance and fundraising in private equity

A-Tier
Journal: Journal of Financial Economics
Year: 2017
Volume: 124
Issue: 1
Pages: 172-194

Authors (2)

Score contribution per author:

2.011 = (α=2.01 / 2 authors) × 2.0x A-tier

α: calibrated so average coauthorship-adjusted count equals average raw count

Abstract

General partners (GPs) in private equity (PE) report the performance of an existing fund while raising capital for a follow-on fund. Interim performance has large effects on fundraising outcomes. The impact is greatest when backed by exits and for low reputation GPs. Faced with these incentives, GPs time their fundraising to coincide with periods of peak performance through two strategies: (1) exit and fundraise and (2) net asset value (NAV) management. Consistent with the former, performance peaks are greatest for funds with high realization rates. Consistent with the latter, low reputation GPs with low realization rates experience performance peaks and erosions in performance after fundraising.

Technical Details

RePEc Handle
repec:eee:jfinec:v:124:y:2017:i:1:p:172-194
Journal Field
Finance
Author Count
2
Added to Database
2026-01-24