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Are Lower Private Equity Returns the New Normal?

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  • Eileen Appelbaum
  • Rosemary Batt

Abstract

U.S. private equity fundraising had its best year ever in 2015 — raising $185 billion. But is the enthusiasm of investors warranted? Do PE buyout funds deliver outsized returns to investors and will they do so in the future? This report answers this question by reviewing the most recent empirical evidence on buyout fund performance; the answer is no. While median private equity buyout funds once beat the S&P 500, they have not done so since 2006 -- despite industry claims to the contrary.

Suggested Citation

  • Eileen Appelbaum & Rosemary Batt, 2016. "Are Lower Private Equity Returns the New Normal?," CEPR Reports and Issue Briefs 2016-10, Center for Economic and Policy Research (CEPR).
    • Handle: RePEc:epo:papers:2016-10
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    File URL: http://cepr.net/images/stories/reports/private-equity-performance-2016-06.pdf
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    References listed on IDEAS

    as
    1. Steven N. Kaplan & Antoinette Schoar, 2005. "Private Equity Performance: Returns, Persistence, and Capital Flows," Journal of Finance, American Finance Association, vol. 60(4), pages 1791-1823, August.
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    Cited by:

    1. Edouard Nouvellon & Hugues Pirotte, 2019. "Revisiting private equity performance computation for multi-asset investors," Journal of Asset Management, Palgrave Macmillan, vol. 20(6), pages 421-432, October.

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    More about this item

    JEL classification:

    • G - Financial Economics
    • G2 - Financial Economics - - Financial Institutions and Services
    • G28 - Financial Economics - - Financial Institutions and Services - - - Government Policy and Regulation
    • G3 - Financial Economics - - Corporate Finance and Governance
    • G38 - Financial Economics - - Corporate Finance and Governance - - - Government Policy and Regulation

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