Mutual funds that hold private securities value these securities at considerably different prices. Prices vary across fund families, are updated every 2.5 quarters on average and are revised dramatically at follow-on funding events. The infrequent, but dramatic price changes yield predictable fund returns, though we find little evidence of fund investors exploiting this opportunity by buying (selling) before (after) the follow-on funding events. Consistent with fund families opportunistically marking up private securities, we find that funds near the top of league tables increase private valuations more around year-end follow-on funding events than funds ranked lower. More
Asset-level Risk and Return in Real Estate Investments
Relatively little is known in the academic literature about the idiosyncratic returns of individual real estate investments, though quite a few commercial properties command prices commensu- rate with the market values of small publicly traded companies. More
