Universität zu Köln

Huther, Niklas, Robinson, David T., Sievers, Sonke and Hartmann-Wendels, Thomas (2020). Paying for Performance in Private Equity: Evidence from Venture Capital Partnerships. Manage. Sci., 66 (4). S. 1756 - 1783. CATONSVILLE: INFORMS. ISSN 1526-5501

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Abstract

We offer the first empirical analysis connecting the timing of general partner (GP) compensation to private equity fund performance. Using detailed information on limited partnership agreements between private equity limited and general partners, we find that GP-friendly contracts-agreements that pay general partners on a deal-by-deal basis instead of withholding carried interest until a benchmark return has been earned- are associated with higher returns, both gross and net of fees. This is robust to measures of performance persistence, time period effects, and other contract terms and is related to exit-timing incentives. Timing practices balance GP incentives against limited partner downside protection.

Item Type:	Journal Article
Creators:	Creators Email ORCID ORCID Put Code Huther, Niklas UNSPECIFIED UNSPECIFIED UNSPECIFIED Robinson, David T. UNSPECIFIED UNSPECIFIED UNSPECIFIED Sievers, Sonke UNSPECIFIED UNSPECIFIED UNSPECIFIED Hartmann-Wendels, Thomas UNSPECIFIED UNSPECIFIED UNSPECIFIED
URN:	urn:nbn:de:hbz:38-338442
DOI:	10.1287/mnsc.2018.3274
Journal or Publication Title:	Manage. Sci.
Volume:	66
Number:	4
Page Range:	S. 1756 - 1783
Date:	2020
Publisher:	INFORMS
Place of Publication:	CATONSVILLE
ISSN:	1526-5501
Language:	English
Faculty:	Unspecified
Divisions:	Unspecified
Subjects:	no entry
Uncontrolled Keywords:	Keywords Language COMPENSATION; RETURNS Multiple languages Management; Operations Research & Management Science Multiple languages
URI:	http://kups.ub.uni-koeln.de/id/eprint/33844