NATIONAL BUREAU OF ECONOMIC RESEARCH
NATIONAL BUREAU OF ECONOMIC RESEARCH

Limited Partner Performance and the Maturing of the Private Equity Industry

Berk A. Sensoy, Yingdi Wang, Michael S. Weisbach

NBER Working Paper No. 18793
Issued in February 2013
NBER Program(s):   CF

We evaluate the performance of limited partners' (LPs) private equity investments over time. Using a sample of 14,380 investments by 1,852 LPs in 1,250 buyout and venture funds started between 1991 and 2006, we find that the superior performance of endowment investors in the 1991-1998 period, documented in prior literature, is mostly due to their greater access to the top-performing venture capital partnerships. In the subsequent 1999-2006 period, endowments no longer outperform, and neither have greater access to funds that are likely to restrict access nor make better investment selections than other types of institutional investors. We discuss how these results are consistent with the general maturing of the industry, as private equity has transitioned from a niche, poorly understood area to a ubiquitous part of institutional investors' portfolios.

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Document Object Identifier (DOI): 10.3386/w18793

Published: Sensoy, Berk A. & Wang, Yingdi & Weisbach, Michael S., 2014. "Limited partner performance and the maturing of the private equity industry," Journal of Financial Economics, Elsevier, vol. 112(3), pages 320-343. citation courtesy of

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