The real-world limitations of private equity performance persistencep

The performance of a private equity fund manager’s previous funds is widely used by investors as an important, if not the most important, criterion to assess the manager’s quality and to decide on commitments to a new fund. This makes intuitive sense and is in line with the finding of so-called “performance persistence” in the leading academic studies on private equity performance. A recent study, conducted by Peracs in conjunction with the Buyout Research Program at HEC Paris, further examines the real-world implications of performance persistence in private equity.