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Should Investors Care Where Private Equity Managers Went to School?

Author

Listed:
  • Florian Fuchs
  • Roland Füss
  • Tim Jenkinson
  • Stefan Morkoetter

Abstract

In this paper, we investigate whether the educational background of private equity managers, which represents an important part of their human capital, impacts fund performance. In particular, we explore three potential channels of how their educational background may influence fund performance: (i) institutional quality, (ii) individual performance, and (iii) academic variety. We find that a combination of top-tier education and work experience identifies individual performance in the management team. In addition, academic variety, in particular among graduates of high-ranked universities, rather than uniform institutional quality, is an important return driver.

Suggested Citation

  • Florian Fuchs & Roland Füss & Tim Jenkinson & Stefan Morkoetter, 2022. "Should Investors Care Where Private Equity Managers Went to School?," Review of Corporate Finance, now publishers, vol. 2(3), pages 451-449, December.
    • Handle: RePEc:now:jnlrcf:114.00000021
    DOI: 10.1561/114.00000021
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    Citations

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    Cited by:

    1. Douglas Cumming & Pedro Monteiro, 2023. "Sovereign wealth fund investment in venture capital, private equity, and real asset funds," Journal of International Business Policy, Palgrave Macmillan, vol. 6(3), pages 330-355, September.
    2. Giang Nguyen & My Nguyen & Anh Viet Pham & Man Duy Marty Pham, 2023. "Navigating investment decisions with social connectedness : Implications for venture capital," Post-Print hal-04325756, HAL.
    3. Cumming, Douglas J. & Nguyen, Giang & Nguyen, My, 2022. "Product market competition, venture capital, and the success of entrepreneurial firms," Journal of Banking & Finance, Elsevier, vol. 144(C).
    4. 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).
    5. Douglas Cumming & Satish Kumar & Weng Marc Lim & Nitesh Pandey, 2023. "Mapping the venture capital and private equity research: a bibliometric review and future research agenda," Small Business Economics, Springer, vol. 61(1), pages 173-221, June.
    6. Aldatmaz, Serdar & Celikyurt, Ugur, 2023. "The effect of venture capital backing on innovation in newly public firms," Journal of Empirical Finance, Elsevier, vol. 74(C).
    7. Switzer, Lorne N. & El Meslmani, Nabil & Zhai, Xinkai, 2022. "IPO performance and the size effect: Evidence for the US and Canada," The North American Journal of Economics and Finance, Elsevier, vol. 62(C).
    8. Faverzani, Lara, 2024. "Financial resource pooling in club deals," Journal of Corporate Finance, Elsevier, vol. 84(C).
    9. Zhao, Jing & Cao, June & Huang, Jingchang, 2023. "CEO/board medical background and stock returns during the COVID-19 pandemic," Economic Modelling, Elsevier, vol. 127(C).
    10. Nguyen, Giang & Nguyen, My & Pham, Anh Viet & Pham, Man Duy (Marty), 2023. "Navigating investment decisions with social connectedness: Implications for venture capital," Journal of Banking & Finance, Elsevier, vol. 155(C).

    More about this item

    Keywords

    Buyout funds; fund teams; education; fund performance; university;
    All these keywords.

    JEL classification:

    • G11 - Financial Economics - - General Financial Markets - - - Portfolio Choice; Investment Decisions
    • G15 - Financial Economics - - General Financial Markets - - - International Financial Markets
    • G24 - Financial Economics - - Financial Institutions and Services - - - Investment Banking; Venture Capital; Brokerage
    • G34 - Financial Economics - - Corporate Finance and Governance - - - Mergers; Acquisitions; Restructuring; Corporate Governance

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