How is the level of private equity fund-raising

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1. Why are there extreme disparities in performance among private equity funds relative to disparities in performance among other asset classes?

2. The evidence indicates that first-time funds tend to be the weakest performers; why would someone want to invest in one?

3. Why do subsequent funds tend to outperform their predecessors? Is there a correlation between performance and maturity?

4. If performance persists, why would anyone ever invest in a mid- or bottom-tier fund?

5. As a lower-tier fund, how would you go about improving your performance?

6. What happens to the compensation structure of a partner (as it relates to the traditional 2 percent fee and 20 percent carried interest) as the assets under management per partner grows? What happens to the alignment of interests among LPs and GPs?

7. Over time, why do VC groups tend to become less specialized? Is this more common for funds focused on certain sectors than others?

8. How is the level of private equity fund-raising correlated with the public markets? Why is this the case?

9. Why are experienced VC and buyout firms more active than their less seasoned peers during periods of public market attractiveness?

10. Why would private equity firms be willing to pay higher prices for enterprises during boom periods when they are no more likely to go public or be sold for higher valuations than enterprises purchased in other periods? Why not sit on the sidelines until valuation expectations come down?

11. Draw the shift in supply and demand for private equity capital from the peak of the boom in 2007 to the immediate recession that followed in 2008 to the period of recovery in 2009.

12. What are some of the ways that public capital can better address the gaps in venture funding? What are some examples?

Reference no: EM13734892

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