Brown, Gregory W.
[VerfasserIn]
;
Gredil, Oleg
[Sonstige Person, Familie und Körperschaft];
Kaplan, Steven N.
[Sonstige Person, Familie und Körperschaft]
Do Private Equity Funds Manipulate Reported Returns?
Anmerkungen:
In: Journal of Financial Economics (JFE), Forthcoming
Nach Informationen von SSRN wurde die ursprüngliche Fassung des Dokuments April 30, 2017 erstellt
Beschreibung:
Private equity funds hold assets that are hard to value. Managers may have an incentive to distort reported valuations if these are used by investors to decide on commitments to subsequent funds managed by the same firm. Using a large dataset of buyout and venture funds, we test for the presence of reported return manipulation. We find evidence that some underperforming managers inflate reported returns during times when fundraising takes place. However, those managers are less likely to raise a next fund, suggesting that investors can see through the manipulation on average. In contrast, we find that top-performing funds likely understate their valuations. A simple theoretical framework rationalizes our empirical results as well as those of related papers