Buy low, sell high? Do private equity fund managers have market timing abilities?
When investors commit capital to a private equity fund, the money is not immediately invested but is called by the fund manager throughout an investment period of up to five years. The private equity business model allows fund managers to invest and divest the committed capital during the fund'...
| Egile Nagusiak: | , , , |
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| Formatua: | Journal article |
| Hizkuntza: | English |
| Argitaratua: |
Elsevier
2022
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| _version_ | 1826312354613166080 |
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| author | Jenkinson, T Morkoetter, S Schori, T Wetzer, T |
| author_facet | Jenkinson, T Morkoetter, S Schori, T Wetzer, T |
| author_sort | Jenkinson, T |
| collection | OXFORD |
| description | When investors commit capital to a private equity fund, the money is not immediately invested but is called by the fund manager throughout an investment period of up to five years. The private equity business model allows fund managers to invest and divest the committed capital during the fund's lifetime at their own discretion, which gives them the flexibility to time the markets. Based on 7,591 private equity deals, which are benchmarked against 14,390 M&A transaction multiples, we find evidence that on average private equity funds are able to create value by timing the financial markets. Market timing ability is not captured by performance measures such as the PME, yet it is a potential source of returns for investors. |
| first_indexed | 2024-03-07T08:27:44Z |
| format | Journal article |
| id | oxford-uuid:801b0fad-5085-4836-98b1-ab300d984156 |
| institution | University of Oxford |
| language | English |
| last_indexed | 2024-03-07T08:27:44Z |
| publishDate | 2022 |
| publisher | Elsevier |
| record_format | dspace |
| spelling | oxford-uuid:801b0fad-5085-4836-98b1-ab300d9841562024-02-26T10:38:09ZBuy low, sell high? Do private equity fund managers have market timing abilities?Journal articlehttp://purl.org/coar/resource_type/c_dcae04bcuuid:801b0fad-5085-4836-98b1-ab300d984156EnglishSymplectic ElementsElsevier2022Jenkinson, TMorkoetter, SSchori, TWetzer, TWhen investors commit capital to a private equity fund, the money is not immediately invested but is called by the fund manager throughout an investment period of up to five years. The private equity business model allows fund managers to invest and divest the committed capital during the fund's lifetime at their own discretion, which gives them the flexibility to time the markets. Based on 7,591 private equity deals, which are benchmarked against 14,390 M&A transaction multiples, we find evidence that on average private equity funds are able to create value by timing the financial markets. Market timing ability is not captured by performance measures such as the PME, yet it is a potential source of returns for investors. |
| spellingShingle | Jenkinson, T Morkoetter, S Schori, T Wetzer, T Buy low, sell high? Do private equity fund managers have market timing abilities? |
| title | Buy low, sell high? Do private equity fund managers have market timing abilities? |
| title_full | Buy low, sell high? Do private equity fund managers have market timing abilities? |
| title_fullStr | Buy low, sell high? Do private equity fund managers have market timing abilities? |
| title_full_unstemmed | Buy low, sell high? Do private equity fund managers have market timing abilities? |
| title_short | Buy low, sell high? Do private equity fund managers have market timing abilities? |
| title_sort | buy low sell high do private equity fund managers have market timing abilities |
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