The First-Time in Private Equity: Does Experience Help to Raise Capital?
نویسنده
چکیده
Compared to mature investment firms, first-time funds in private equity lack an investment and performance track record, and require alternative signals to establish initial trust with investors. The paper finds that investors allocate more capital to first-time funds if they have a higher share of managers with relevant experience, such as from another private equity group or a bank. In particular, experience from high-reputation employers raises the fundraising outcome, while the relevance of experience with the same previous firm, heterogeneity in the exposure, and operational experience is limited at best.
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