Research
Our Research Strategy
At IPC, data, research and education improve understanding of the role of private capital in the global economy. An essential first step for generating quality research is access to reliable data. Thus, our top priority is making research-quality data sources widely available to academic researchers.
Access to data on private investments presents challenges, including confidentiality concerns, the proprietary nature of many datasets, and the diffuse nature of private investments. However, we believe that these challenges are best addressed by a deliberate systematic approach through a combined academic effort. In many cases, data owners welcome the benefits derived from confidential analysis of their data by objective academic researchers.
IPC currently focuses on three research areas:
Private Equity Real Estate Active Management
Do GP Commitments Matter?
It is standard practice for private equity general partners (GPs) to commit capital to a fund alongside limited partners (LPs). Despite the ubiquity of the practice, and the belief that it aligns GP-LP incentives, there is almost no large-sample empirical analysis of GP commitments. In this analysis, we seek to fill the gap in research...
MoreInvestor Expertise and Private Investment Selection
Despite the remarkable growth of individual investors in private markets, little is known about their investment patterns. We test the impact of investor expertise on venture capital fund selection by conducting an experiment with limited partners.
MoreThe Performance of Private Video Game Equity
I use deal-level data from StepStone to perform the first ever analysis of private video game investment using 566 private video game investment deals, most of which come in the form of venture capital. Using these deals, I analyze private video game companies as a source of value accretion and as investment opportunities.
MoreBank Capital and the Growth of Private Credit
This paper examines whether regulatory arbitrage can explain the growth of private credit. We show that business development companies (BDCs) — closed-end funds that provide a significant share of nonbank loans to middle market firms — are very well capitalized according to bank capital frameworks. More
The Private Capital Alpha
The alpha of an investment reflects its ability to increase the Sharpe ratio of a benchmark portfolio allocation based on tradable factors. We argue that, in the context of private capital, the usual approach to estimate alpha is misleading because it ignores the economic realities of investing in private markets. More
Private Debt versus Bank Debt in Corporate Borrowing
This paper examines the interaction between private debt and bank debt in corporate borrowing. Combining administrative bank loan-level data with non-bank private debt deals, we document that about half of U.S. private debt borrowers also rely on bank loans. More
Are Some Angels Better Than Others?
This paper explores the tremendous variation in investment performance of angel investors. The returns are highly skewed: Despite the massive losses incurred in most investments, the mean return is twice the invested capital.
MoreThe Trillion Dollar Bonus of Private Capital Fund Managers
Carry is a performance-related payment made to private capital fund managers (general partners of limited partnerships). We find that as much as 70% of invested capital is in the carry, and funds focusing on Leveraged Buy-Outs and Secondaries are nearly all in the carry (83%, 91%). More
Timing Sustainable Engagement in Real Asset Investments
This paper estimates the effect of sustainable shareholder engagement on firm's investments. We study the real estate industry where investments are sporadic and occur following depreciation cycles. More
Leveraged Payouts: How Using New Debt to Pay Returns in Private Equity Affects Firms, Employees, Creditors, and Investors
Private equity (PE) managers often generate financial returns without selling the portfolio company by leveraging company assets or cash flows. We study one such “leveraged payout" transaction, the dividend recapitalization (DR). More
