Harris is with University of Virginia, Darden School of Business; Jenkinson is with Said Business School, University of Oxford, and CEPR; and Kaplan is with University of Chicago Booth School of Business and NBER. This research has been supported by the UAI Foundation and the Center for Research in Security Prices. Rui Cui provided able research assistance. We thank Burgiss for supplying data. Kaplan has consulted to buyout and venture capital general partners and limited partners. He also has invested in private and public equities. We thank James Bachman, Robert Bartlett, Cam Harvey (the Editor), Stuart Lucas, David Robinson, two anonymous referees, the Associate Editor and seminar participants at Chicago Booth, Harvard Business School, the JOIM Conference at Stanford Business School, NBER Corporate Finance, the New York Federal Reserve, the University of North Carolina Private Equity Conference, and the University of Penn Law School ILE Corporate Roundtable for helpful comments.
Private Equity Performance: What Do We Know?
Article first published online: 12 SEP 2014
© 2014 the American Finance Association
The Journal of Finance
Volume 69, Issue 5, pages 1851–1882, October 2014
How to Cite
HARRIS, R. S., JENKINSON, T. and KAPLAN, S. N. (2014), Private Equity Performance: What Do We Know?. The Journal of Finance, 69: 1851–1882. doi: 10.1111/jofi.12154
- Issue published online: 12 SEP 2014
- Article first published online: 12 SEP 2014
- Accepted manuscript online: 27 MAR 2014 01:50PM EST
- Manuscript Accepted: 26 JUL 2013
- Manuscript Received: 18 FEB 2012
- UAI Foundation
- Center for Research in Security Prices
We study the performance of nearly 1,400 U.S. buyout and venture capital funds using a new data set from Burgiss. We find better buyout fund performance than previously documented—performance has consistently exceeded that of public markets. Outperformance versus the S&P 500 averages 20% to 27% over a fund's life and more than 3% annually. Venture capital funds outperformed public equities in the 1990s, but underperformed in the 2000s. Our conclusions are robust to various indices and risk controls. Performance in Cambridge Associates and Preqin is qualitatively similar to that in Burgiss, but is lower in Venture Economics.