Skip to Main Content
HBS Home
  • About
  • Academic Programs
  • Alumni
  • Faculty & Research
  • Baker Library
  • Giving
  • Harvard Business Review
  • Initiatives
  • News
  • Recruit
  • Map / Directions
Faculty & Research
  • Faculty
  • Research
  • Featured Topics
  • Academic Units
  • …→
  • Harvard Business School→
  • Faculty & Research→
Publications
Publications
  • 2019
  • Working Paper
  • HBS Working Paper Series

Investing Outside the Box: Evidence from Alternative Vehicles in Private Equity

By: Josh Lerner, Jason Mao, Antoinette Schoar and Nan R. Zhang
  • Format:Print
  • | Language:English
  • | Pages:66
ShareBar

Abstract

This paper uses previously unexplored custodial data to examine the use of alternative investment vehicles in private equity over four decades. We document a steep increase in the capital directed to alternative vehicles, with these vehicles approaching a 40% share of all PE commitments in 2017. The average performance of alternative vehicles matches that of the overall PE market, but the performance lagged that of the general partners’ corresponding main funds. The best performance in alternative vehicles was by endowments, private pensions, and insurers. Finally, LPs with better past performance invested in alternative vehicles with better performance, even after conditioning on the general partners’ past records. The results suggest that returns in private equity increasingly depend on the match between GPs and LPs and both parties’ outside options.

Keywords

Investment Funds; Private Equity; Performance

Citation

Lerner, Josh, Jason Mao, Antoinette Schoar, and Nan R. Zhang. "Investing Outside the Box: Evidence from Alternative Vehicles in Private Equity." Harvard Business School Working Paper, No. 19-012, August 2018. (Revised May 2019.)
  • SSRN
  • Read Now

About The Author

Josh Lerner

Entrepreneurial Management
→More Publications

Related Work

    • 2019
    • Faculty Research

    Investing Outside the Box: Evidence from Alternative Vehicles in Private Equity

    By: Josh Lerner, Jason Mao, Antoinette Schoar and Nan R. Zhang
Related Work
  • Investing Outside the Box: Evidence from Alternative Vehicles in Private Equity By: Josh Lerner, Jason Mao, Antoinette Schoar and Nan R. Zhang
ǁ
Campus Map
Harvard Business School
Soldiers Field
Boston, MA 02163
→Map & Directions
→More Contact Information
  • Make a Gift
  • Site Map
  • Jobs
  • Harvard University
  • Trademarks
  • Policies
  • Digital Accessibility
Copyright © President & Fellows of Harvard College