Returns on capital of the private equity asset class : an alternative methodology and comparative analysis

This paper examines the private equity asset class by presenting an alternative performance measurement methodology and applying this methodology to a sample population of 60 private equity limited partnerships. The limited partnerships comprising the sample population covered the time period of December 1978 through December 1999 and did not include any limited partnerships focusing on early or middle stage venture capital. The sample population's performance was compared to the Standard and Poor's 500 index. Both traditional and the alternative performance measurement methodologies were used in examining the sample population and the comparative asset class, the S&P 500. These performance measurement methodologies indicated that a significant amount of the 60 private equity limited partnerships were outperformed by the S&P 500 over identical time frames. In addition, there were 16 instances where a traditional performance measurement methodology indicated that a limited partnership outperformed the S&P 500 when the alternative performance measurement methodology indicated the opposite.

Department dc:contributor.department

Sloan School of Management.

Grantor dc:publisher

Massachusetts Institute of Technology

Year dc:date.issued

2000

Author dc:creator

• Lick, Jeffrey F. (Jeffrey Francis), 1969-

Advisor dc:contributor.advisor

• Stewart C. Myers.

• Sloan School of Management.

Statement dc:rights

• M.I.T. theses are protected by copyright. They may be viewed from this source for any purpose, but reproduction or distribution in any format is prohibited without written permission. See provided URL for inquiries about permission.

Licence dc:rights.uri

• http://dspace.mit.edu/handle/1721.1/7582

Language dc:language.iso

eng

Handle dc:identifier.uri

http://hdl.handle.net/1721.1/9199

OAI identifier oai:identifier

oai:dspace.mit.edu:1721.1/9199