If You’re Not Top Quartile…

…then there is no point in investing in PE.  And now, lots of that edge has been whittled away.  That is one reason we rec’d against PE in our book.  

I think there is a big opp for a research boutique focused on the crowdfunding space as people are going to get their heads handed to them.  Most spend more time researching a TV than they do investing in startups. (Via Abnormal Returns)

Limited Partner Performance and the Maturing of the Private Equity Industry


We evaluate the performance of limited partners’ (LPs) private equity investments over time. Using a sample of 14,380 investments by 1,852 LPs in 1,250 buyout and venture funds started between 1991 and 2006, we find that the superior performance of endowment investors in the 1991-1998 period, documented in prior literature, is mostly due to their greater access to the top-performing venture capital partnerships. In the subsequent 1999-2006 period, endowments no longer outperform, and neither have greater access to funds who are likely restrict access nor make better investment selections than other types of institutional investors. We discuss how these results are consistent with the general maturing of the industry, as private equity has transitioned from a niche, poorly understood area to a ubiquitous part of institutional investors’ portfolios. 

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