The global growth of the private equity industry has been spectacular over the last years. According to Private Equity Intelligence, private equity funds worldwide raised USD 432 billion in 2006 which is an increase of 38% on the already strong 2005 figure of USD 313bn.1 In 1985, global fundraising has been only USD 5bn indicating an annual growth rate of around of 24% of the asset class over the last more than 20 years.2 The private equity universe, i.e. the total private equity assets under management, accounted for around USD 1,400 billion in 2006.3 The growth of the asset class also reflects in the trend for larger fund sizes.4 The ten largest funds in 2006 together raised USD 100bn. Six of them were among the largest private equity funds of all times.5 As these funds use typically high leverage ratios when investing in portfolio companies, their actual economic impact is even greater as these figures suggest.6 As a result, the industry has developed significantly in the past years to the extent that it is not longer regarded as the niche sector it once was. Today, private equity has “moved from the fringe to the centre of the capitalist action”7 and private equity investors are shaping entire industries with their investment strategies.


Private Equity Fund Manager International Financial Reporting Standard Fund Investor Asset Class 
These keywords were added by machine and not by the authors. This process is experimental and the keywords may be updated as the learning algorithm improves.


Unable to display preview. Download preview PDF.

Unable to display preview. Download preview PDF.


  1. 1.
    See Private Equity Intelligence (2007a), p. 3.Google Scholar
  2. 2.
    See Phalippou (2007), p. 1.Google Scholar
  3. 3.
    See Private Equity Intelligence (2007b), p. 13.Google Scholar
  4. 4.
    In 2006 for example, Blackstone raised a USD 15.6bn fund, Texas Pacific Group a USD 15.0bn fund, or Permira a USD 14.7bn fund. Moreover, in 2007, Goldman Sachs Capital Partners is for example expected to close a USD 19bn vehicle. See Smith (2007).Google Scholar
  5. 5.
    See Private Equity Intelligence (2007a), p. 3.Google Scholar
  6. 6.
    See Phalippou (2007), p. 1.Google Scholar
  7. 7.
    Bishop (2004), p. 2.Google Scholar
  8. 8.
    See Bance (2004), p. 5.Google Scholar
  9. 9.
    See Achleitner/ Fingerle (2006), p. 729.Google Scholar
  10. 10.
    See Phalippou (2007), p. 1.Google Scholar
  11. 11.
    See Borel (2004), p. 45.Google Scholar
  12. 12.
    See Private Equity Intelligence (2005), p. 2.Google Scholar
  13. 13.
    See Meek (2005b), p. 36.Google Scholar
  14. 14.
    See Meyer/ Mathonet (2005), p. 277.Google Scholar
  15. 15.
    See Anonymous author (2004), p. 42.Google Scholar
  16. 16.
    See Phalippou (2007), p. 11.Google Scholar
  17. 17.
    See Achleitner (2002a), 145; Robbie/Wright/Chiplin (1997), p. 9.Google Scholar
  18. 18.
    See Phalippou (2007), p. 2; Robbie/Wright/Chiplin (1997), p. 9.Google Scholar
  19. 19.
    Four important research papers focus on the on risk-return relationship from the fund investors’ perspective: Kaplan/ Schoar (2005); Phalippou/Zollo (2005); Kaserer/Diller (2004c); Ljungqvist/Richardson (2003).Google Scholar
  20. 20.
    See Sahlman (1990).Google Scholar
  21. 21.
    Feinendegen/ Schmidt/ Wahrenburg (2003) and Gompers/Lerner (1996) for example pursue an empirical study on private equity limited partnership covenants. Lerner/Schoar (2004) examine reasons for the restrictions on fund investors’ ability to transfer funds and provide evidence. Gompers/Lerner (1999) propose a learning model to explain variations in compensation of fund managers by fund investors and provide empirical evidence.Google Scholar
  22. 22.
    For the fund investors’ selection process see Tausend (2006); Barnes/Menzies (2005). Studies on the fundraising include for example Balboa/Marti (2006); Burton/Schierschmidt (2004); Gompers/Lerner (1998).Google Scholar
  23. 23.
    Only a few studies examine this issue. See for example Kemmerer/ Weidig (2005); Böhler (2004b).Google Scholar
  24. 24.
    This has been found in a survey of large UK investors. Investors gave equal weighting of 3.7 (highest scores) to lack of liquidity and lack of performance transparency when asked to rank perceived risks on a scale of one (low risk) to five (high risk). See CMBOR/Adveq (2005) cited in Skypala (2005).Google Scholar
  25. 25.
    In addition, results of a study conducted on behalf of the European Private Equity & Venture Capital Association on the differences between private equity entities and non-investment companies are integrated in the analysis and discussion. For this study 21 semi-structured interviews with leading private equity experts were carried out. See Achleitner/ Müller (2004).Google Scholar

Copyright information

© Betriebswirtschaftlicher Verlag Dr. Th. Gabler | GWV Fachverlage GmbH, Wiesbaden 2008

Personalised recommendations