Bronwyn Bailey, who heads Research over at the Private Equity Growth Capital Council, turned me on to a great research paper by Harris, Jenkinson, and Kaplan on private equity performance. The authors have the mildest of goals: to say what we actually can say about private equity performance. They then do what all of us should have done — do some careful time series analyses of data from the few research sources available.
Their results? “Average buyout fund returns in the U.S. have exceeded those of public markets for most vintages for a long period of time”. And “average venture capital fund returns in the U.S., on the other hand, outperformed public equities in the 1990s, but have underperformed public equities in the 2000s”.
Worth a careful read over the weekend, I think. And, if it’s not asking too much, maybe a bit of a counterpoint to the witchunt about private equity fund compensation.