Private equity fund performance around the world

We construct a novel and comprehensive dataset to formally explore the returns of private equity funds in non-North American focused markets. We investigate a range of stylized facts on private equity performance and persistence, and compare the findings to the extensive evidence on North American funds. We find that European private equity funds have performed at least similarly to their North American peers throughout the sample period. European funds' performance declines over time even though funds continued to deliver above par with a range of public market indices. Funds focused on Asia Pacific, or Latin America, Middle East and North Africa, and other parts of the world have outperformed in only a few of the sample vintages, both relative to the broad US public market and other regional equity markets. Inconsistent with the "money chasing deals" hypothesis, fund performance does not seem to be driven by the capital infusions into the industry, but by a rather maturing market for profitable deals. Non-North American funds show evidence of return persistence in Europe only, as does a sample of US-backed funds that are diversified globally. Persistence is random outside the European and Global groups, and declines over time, with some variation across regions and investment styles.