Portfolio Strategies of Private Equity Firms: Theory and Evidence

ISBN-13: 9783835005778 / Angielski / Miękka / 2007 / 194 str.

Ulrich Lossen; Prof Dietmar Harhoff Ph. D.

Opis

Driven by the convergence of international ?nancial public markets, investors around the globe are searching for alternative asset classes which provide diversi?cation of their portfolios while earning attractive returns. Private equity, denominating equity investments in privately held companies, promises to ful?ll both criteria. Over the last three decades, the global private equity industry has experienced an enormous growth. Private equity has become an important ingredient in the portfolios of institutional investors, such as banks, insurance companies and pension funds. Despite its increasing importance, relatively few are known about the characteristics and specialities of private equity. Therefore, practitioners are turning to researchers for systematic information in order to take sound investment decisions. In his dissertation, Ulrich Lossen contributes to this need of information. Lossen applies advanced econometric methods to a unique data set which he assembled speci?cally for the purpose of this thesis. His analysis focuses on the choice of portfolio strategies by private equity ?rms and the impact of this choice on funds' performance. His research proceeds in three steps. First, Lossen models the trade-o? between diversi?cation and specialization in private equity funds theoretically. Secondly, he analyzes the in?uence of external factors on the choice of private equity ?rms to diversify their portfolios across di?erent dimensions, such as ?nancing stages, industries, and geographic regions. Finally, he examines the impact of such diversi?cation on private equity funds' performance.

Spis treści

Return and risk of private equity investments Portfolio strategies and optimal structure of private equity funds Optimal level of diversification in private equity funds Choice of portfolio strategies by private equity firms Performance of private equity funds Impact of diversification on private equity funds’ performance

O autorze

Dr. Ulrich Lossen promovierte bei Prof. Dietmar Harhoff, Ph.D. am Institut für Innovationsforschung, Technologiemanagement und Entrepreneurship der Universität München. Er ist Projektleiter für Unternehmensentwicklung der Leoni Kabel Holding GmbH & Co. KG, Roth.

Blurb

Driven by the convergence of international financial public markets, investors around the globe are searching for alternative asset classes which enable diversification of their portfolios while earning attractive returns. Private equity, denominating equity investments in privately held companies, promises to meet both criteria. As a result, over the last three decades, private equity has become an important ingredient in the portfolios of institutional investors, such as banks, insurance companies, and pension funds.

Ulrich Lossen explores the choice of portfolio strategies by private equity firms and the impact of this choice on funds’ performance. Therefore, he applies advanced econometric methods to a unique data set of private equity funds. In a first step, he analyzes the influence of external factors on the choice of private equity firms to diversify their portfolios across different dimensions, such as financing stages, industries, and geographic regions. Then, he examines the impact of such diversification on private equity funds’ performance. The findings can help investors and private equity managers in making proper investment decisions.