Arthur Korteweg

Dean's Associate Professor of Finance and Business Economics, University of Southern California, Marshall School of Business

Arthur Korteweg is the Dean’s Associate Professor in Business Administration and Associate Professor of Finance and Business Economics at the Marshall School of Business at the University of Southern California. His research interests include corporate finance, private equity, and alternative assets more generally. Arthur was previously an Assistant and then Associate Professor of Finance at Stanford University Graduate School of Business. Arthur received an MA from Tilburg University and an MBA and PhD from the University of Chicago Booth School of Business.

Related Publications

Risk and Return in Private Equity

This chapter is both a primer on estimation methods for assessing risk and return in private equity and a survey of the empirical literature.
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Risk-Adjusted Returns of Private Equity Funds: A New Approach

This paper introduces a new metric, alpha, to benchmark the performance of individual private equity funds. Our metric is substantially less sensitive to noise in fund cash flows compared to the popular public market equivalent (PME) and its generalization (GPME), while having the same aggregate pricing implications as GPME.
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Asset Allocation with Private Equity

We survey the literature on the private equity partnership arrangement from the perspective of an outside investor (limited partner). We examine how the partnership arrangement fits into a broader portfolio of investments, and we consider the methods and difficulties in performance measurement, both at the fund level and at the asset class level. We follow with a discussion of performance persistence and the skill and pricing power of both general and limited partners.
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Venture Capital Contracts

We develop a dynamic search and matching model to estimate the impact of venture capital (VC) contract terms on start-up outcomes, and the split of value between entrepreneur and investor, in the presence of endogenous selection. Using a new, large data set of rst nancing rounds of start-up companies, we fi nd an internally optimal equity split between VC and entrepreneur that maximizes the probability of success, consistent with standard double moral hazard theories. However, in virtually all deals, VCs use their bargaining power to receive more equity than is value-maximizing for the start-up. In most cases, participation rights and investor board representation reduce company value, while shifting more value to the investors.
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