Hi guys, I am in an economics program and one of our projects is to do a project involving various types of econometric analysis.I currently work at a PE placement agent firm (3rd party fundraiser), and I would like to somehow relate my project to PE or PE fundraising.
I am currently thinking of my main question being "What is the best type of fund and amount to raise in North America" and gather data of all north american funds and type of funds (buyout, secondary, mezz, vc etc...) I would also gather data on amounts raised (and maybe target amounts to compare percent that actually reached their target amounts)
I am in the beginning stages of this project.
Any ideas to a better question? or how to go about this project?
I have access to preqin and other databases, so finding my data wont be too hard, but do you think this is a good project, or should I impose a different project related to PE?
There are subscription services available that allow you to look at returns for vintage year, fund size and focus.
It's been a few years so some of the names are escaping me...this Venture Source and Prequin are a couple of them. You can also get data from a number of the major public pensions, like Calpers and Wash St Investment board, among many others.
would be a very interesting project - maybe use returns as your DV and use Target Fund Size, Actual Fund Size, Type of Fund, etc. as IVs. would be interesting to see what kind of correlations you get on the IVs to returns of the fund
ahh, thanks for the advice guys. I will definitely do it based on returns data and type of fund/size/target. I will probably also include yrs in business (firm), number of previous funds, restrict it to maybe just north american focused funds, and with a min vintage year. Im just beginning this project for class, but I will certainly ponder over this more. Thank you for getting me to a good start!
I will ask my boss for some other IVs he think would be interesting to look into.
Hello, I'm also working in a similar project for my master degree. Which database did you finally use, I'm triying with Thomson One but it doesn't seem as complete as I read Preqin is? What do you guys think?
I used Preqin because at the time, I had access to it from work
I think if you want to show off some technique the thing to do here is to compare
1) GPs (i.e. PE Funds) controlling for vintage year and strategy 2) Fund Strategies controlling for vintage year
FYI I'd advise you to work backwards from from the data you have available to you. The last thing you want to do is come up with an interesting topic and then realize that's its quite difficult to get the data you need to have a meaningful statistic analysis.
Start with what data services you have available to you and what pieces of data those data services provide, then using that universe of available data try to come up with something private equity related. Also, IMO your goal shouldn't be to come up with some sexy topic because its going to make your life a living hell. Instead your topic should be something where there has been quite a bit of work already done on the topic by various bold faced named in academia, and then add one more step/degree to that analysis.
Notwithstanding any of my above advice, an interesting topic IMO would be to look at Private Equity exits vis-a-vis equity market valuations and fund raising vintages. I.e., when a firm is fund raising / getting ready to fund raise often times they start selling off a bunch of assets so they can return capital to their LPs so that the LPs will have capital to recommitt to the PE fund in 3 months when they hit the road fundraising again. But it would be interesting to see if this in fact the best time to exit the investment or if the sponsors are just selling off the assets at a sub-optimal time just so they can raise their next fund. So you'd want to look at exits by sponsor and whether that sponsor was raising a fund in the next X months to establish that indeed sponsors do/don't selloff assets leading up to fundraising. Then you'd want to see how the timing of those selloffs coincide with equity markets, i.e., is it a good time to sell? These assets will obviously be > 1x MOIC, but question is did they sponsor leave their LPs' money on the table in haste to return capital so that they could obtain a new commitment make another 2/20 off of them. Data would be sponsor funds raised by date, sponsor exits by date, and broad equity market and sector specific equity market performance.
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