The Cost of Private Equity

I. Stoff, R. Braun
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引用次数: 1

Abstract

Private equity (PE) has developed into a well-established asset class with strong growth in capital commitments over the last decades. Consequently, fund returns have decreased over time and investors have become more cost conscious. Based on a unique data set of 358 PE buyout funds with vintage years between 1983 and 2007, we analyze whether the maturing PE asset class has become less costly over time. We define costs as the difference between gross and net returns (return spread) and provide a spread benchmark useful for investors to evaluate a fund’s costliness. Next, we show that, in line with our expectations, return spreads have decreased over time. However, when we control for falling gross returns causing lower performance-based fees, surprisingly, the cost of PE investing has increased. We relate the higher costs to increased levels of dry powder due to swelling capital flows into the industry. We conclude that the PE industry is a victim of its own success, suggesting that investors in the asset class should consider a more anti-cyclical investment approach.
私募股权的成本
私募股权(PE)已发展成为一个成熟的资产类别,在过去几十年里,其资本承诺增长强劲。因此,随着时间的推移,基金回报下降,投资者变得更加注重成本。基于358只私募股权收购基金的独特数据集,我们分析了成熟的私募股权资产类别是否随着时间的推移而变得更便宜。我们将成本定义为总收益和净收益之间的差额(收益差),并为投资者评估基金成本提供了一个有用的利差基准。接下来,我们表明,与我们的预期一致,回报差随着时间的推移而缩小。然而,当我们控制总收益下降导致基于绩效的费用降低时,令人惊讶的是,私募股权投资的成本增加了。我们将较高的成本与由于资本流入该行业而增加的干粉水平联系起来。我们得出的结论是,私募股权行业是其自身成功的受害者,这表明该资产类别的投资者应该考虑一种更反周期的投资方式。
本文章由计算机程序翻译,如有差异,请以英文原文为准。
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