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Size matters: Unpacking the relationship between institutional investor size and private equity asset allocation within diverse institutional contexts

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  • Cumming, Douglas
  • Khan, Muhammad Zubair
  • Khan, Naimat U.
  • Khan, Zafir Ullah

Abstract

This study examines the relationship between institutional investors’ size and their inclination towards private equity investments, hypothesizing a U-shaped pattern. It also explores how this relationship is influenced by the institutional context. Using a dataset of 5668 firms across 52 countries from 1991 to 2017, we observe that small and large institutional investors exhibit a stronger preference for private equity compared to intermediate-sized counterparts. Smaller investors show heightened interest in private equity within favorable contexts, while larger investors pursue such opportunities in unfavorable contexts. Our research offers valuable insights for policymakers and investors of diffferent sizes making private equity investments in diverse institutional contexts.

Suggested Citation

  • Cumming, Douglas & Khan, Muhammad Zubair & Khan, Naimat U. & Khan, Zafir Ullah, 2024. "Size matters: Unpacking the relationship between institutional investor size and private equity asset allocation within diverse institutional contexts," Journal of International Financial Markets, Institutions and Money, Elsevier, vol. 92(C).
    • Handle: RePEc:eee:intfin:v:92:y:2024:i:c:s1042443124000246
    DOI: 10.1016/j.intfin.2024.101958
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