Please use this identifier to cite or link to this item: http://hdl.handle.net/10419/94165
Authors: 
Lossen, Ulrich
Year of Publication: 
2006
Series/Report no.: 
SFB/TR 15 Discussion Paper 192
Abstract: 
This paper is the first systematic analysis of the impact of diversification on the performance of private equity funds. A unique data set allows the exact evaluation of diversification across the dimensions financing stages, industries, and countries. Very different levels of diversification can be observed across sample funds. While some funds are highly specialized others are highly diversified. The empirical results show that the rate of return of private equity funds declines with diversification across financing stages, but increases with diversification across industries. Accordingly, the fraction of portfolio companies which have a negative return or return nothing at all, increase with diversification across financing stages. Diversification across countries has no systematic effect on the performance of private equity funds.
Subjects: 
private equity
diversification
specialization
performance
rate of return
percentage of loss
JEL: 
G11
G24
M13
Persistent Identifier of the first edition: 
Document Type: 
Working Paper

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