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


The Private Capital Alpha

September 25, 2024

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 

August 01, 2024

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?

July 10, 2024

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.

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The Trillion Dollar Bonus of Private Capital Fund Managers

July 05, 2024

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

Creative Destruction, Stock Return Volatility, and the Number of Listed Firms

June 27, 2024

We explain the relation between idiosyncratic volatility and the number of listed firms through Schumpeterian creative destruction.

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The Performance of Small Business Investment Companies

June 19, 2024

We utilize results of a survey of Small Business Investment Companies (SBICs), along with data from MSCI-Burgiss, to perform a novel analysis of SBIC performance. Overall, we find via the survey that SBIC funds outperform comparable non-SBIC peers by an average of around 4%...

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Venture Debt as Bridge Financing

May 13, 2024

We show that venture debt often acts as bridge financing to an equity round or acquisition. We argue that venture lenders have distinct skill sets from traditional venture capitalists (VCs) that make them the natural investors while the company awaits the resolution of important strategic uncertainty. More

Interim Valuations, Predictability, and Outcomes in Private Equity

May 13, 2024

Using a novel dataset of U.S. buyout and VC investments, we study the informativeness of managers’ interim valuation reports of portfolio companies on final outcomes. We find that when investors assess the performance of individual portfolio companies, they can do better than just relying on the most recent reported valuation.

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What Do We Know About Institutional-Quality Hedge Funds?

May 09, 2024

Using publicly available sources such as trade press and Form ADV filings, we compile a list of 561 “institutional-quality” hedge fund managers that each have at least 1 billion USD in primary hedge fund assets under management.

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Risk-Adjusting the Returns to Private Debt Funds

March 26, 2024

Private debt funds are the fastest growing segment of the private capital market. We evaluate their risk-adjusted returns, applying a cash-flow based method to form a replicating portfolio that mimics their risk profiles. More