First in the Queue: The Role of Access Privileges in Private Equity Performance

Abstract

Access privileges matter in private equity markets. Funds of funds and other financial intermediaries can create value not only by selecting, but also by being able to access, better investment opportunities. We find that access-constrained funds outperform their peers, and that limited partners with access privileges tend to re-commit to access-constrained managers. The findings suggest that access privileges play an important role in explaining value creation and limited partners’ performance persistence in private markets.

Authors

Andrea Carnelli Dompé, Pantheon Ventures (UK) LLP
Daniel Ferreira, London School of Economics – Department of Finance; European Corporate Governance Institute (ECGI); Centre for Economic Policy Research (CEPR)
Davide Ferri, Federated Hermes
Pedro A. C. Saffi, University of Cambridge – Judge Business School
Bo Tang, London School of Economics & Political Science (LSE)