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Financial intermediation in private equity: How well do funds of funds perform?

Abstract:
This paper focuses on funds of funds (FOFs) as a form of financial intermediation in private equity (both buyout and venture capital). After accounting for fees, FOFs provide returns equal to or above public market indices for both buyout and venture capital. While FOFs focusing on buyouts outperform public markets, they underperform direct fund investment strategies in buyout. In contrast, the average performance of FOFs in venture capital is on a par with results from direct venture fund investing. This suggests that FOFs in venture capital (but not in buyouts) are able to identify and access superior performing funds.
Publication status:
Published
Peer review status:
Peer reviewed

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Publisher copy:
10.1016/j.jfineco.2018.04.013

Authors

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Institution:
University of Oxford
Oxford college:
Keble College
Role:
Author


Publisher:
Elsevier
Journal:
Journal of Financial Economics More from this journal
Volume:
129
Issue:
2
Pages:
287-305
Publication date:
2018-05-07
Acceptance date:
2017-06-08
DOI:
EISSN:
1879-2774
ISSN:
0304-405X


Keywords:
Pubs id:
pubs:698917
UUID:
uuid:38e81150-39fb-4024-ad65-99acdae0e736
Local pid:
pubs:698917
Source identifiers:
698917
Deposit date:
2017-06-09
ARK identifier:

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