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Institutional Investors in Private Equity Funds in Europe

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  • Krystyna Brzozowska

Abstract

Purpose: The aim of the review study is to analyze and assess the structure of institutional investors in private equity funds in Europe. Design/Approach: The research concerning the structure of institutional investors in private equity funds on European market in 2018- 2022 was conducted on the basis of secondary data from statistical data mainly included in research conducted by Invest Europe. Findings: The aim of private equity (PE) is to provide a high return to investors on those assets, assigning expert management teams to manage the companies and assets outside of the glare of public markets. PE has grown rapidly over the last three decades. Over the last decades investing in PE and real assets has gained considerable momentum. Achieving high exposure to PE is a challenge faced by institutional investors who in recent years have been building sizable allocations to this alternative investment vehicle. Successfully acquiring, managing, and exiting these investments directly demands strong expertise and incentives that most institutional investors are lacking. The vast majority of private equity funds are organized as limited partnerships responsible for fundraising investment decisions, and development of the portfolio companies. Practical implication: The research conducted on a role of institutional investors in PE activities may provide a rationale for expanding research in this area in another countries and regions and assessing the vulnerability of financing relationships to unexpected external difficulties. Originality/Value: Study, in the form of a scientific contribution with a high degree of applicability, takes the form of a review using literature and published statistics and was geared towards analyzing and assessing changes in the investments and numbers of institutional investors in European PE funds market.

Suggested Citation

  • Krystyna Brzozowska, 2023. "Institutional Investors in Private Equity Funds in Europe," European Research Studies Journal, European Research Studies Journal, vol. 0(4), pages 651-659.
    • Handle: RePEc:ers:journl:v:xxvi:y:2023:i:4:p:651-659
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    References listed on IDEAS

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    1. Aleksandar Andonov & Roman Kräussl & Joshua Rauh & Stijn Van Nieuwerburgh, 2021. "Institutional Investors and Infrastructure Investing [Pension fund asset allocation and liability discount rates]," The Review of Financial Studies, Society for Financial Studies, vol. 34(8), pages 3880-3934.
    2. Douglas Cumming & Sofia Johan, 2007. "Socially Responsible Institutional Investment in Private Equity," Journal of Business Ethics, Springer, vol. 75(4), pages 395-416, November.
    3. Irena Jindrichovska & Erginbay Ugurlu & Eleftherios I. Thalassinos, 2020. "Exploring the Trend of Czech FDIs and their Effect to Institutional Environment," International Journal of Economics & Business Administration (IJEBA), International Journal of Economics & Business Administration (IJEBA), vol. 0(1), pages 94-108.
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    More about this item

    Keywords

    private equity; funds; limited partnerships; institutional investors; Europe.;
    All these keywords.

    JEL classification:

    • G11 - Financial Economics - - General Financial Markets - - - Portfolio Choice; Investment Decisions
    • G15 - Financial Economics - - General Financial Markets - - - International Financial Markets
    • G2 - Financial Economics - - Financial Institutions and Services
    • O52 - Economic Development, Innovation, Technological Change, and Growth - - Economywide Country Studies - - - Europe
    • O16 - Economic Development, Innovation, Technological Change, and Growth - - Economic Development - - - Financial Markets; Saving and Capital Investment; Corporate Finance and Governance

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