The First Time in Private Equity: A Closer Look on Management Teams

File pdf 580KB

First time funds lack investment and performance history to reduce information asymmetry for their investors. As an alternative signal, I investigate the predictive power of the managers’ profile for fund raising, strategy, and performance. Evaluating a comprehensive data set on 567 newly raised buyout funds, 6,229 investments, and 1,388 partners reveals team and investment characteristics of successful managers. Professional experience dominates education and team diversity in fund raising. However, subsequent performance is negatively related to size and primarily driven by the partners’ strategic investment choices, which in turn reflect their previous attainments.

Author(s):

Florian Fuchs    
University of St.Gallen
Singapore