The Performance of Private Equity Funds: Does Diversification Matter?

This paper is the first systematic analysis of the impact of diversification on the performance of private equity funds. A unique data set allows the exact evaluation of diversification across the dimensions financing stages, industries, and countries. Very different levels of diversification can be observed across sample funds. While some funds are highly specialized others are highly diversified. The empirical results show that the rate of return of private equity funds declines with diversification across financing stages, but increases with diversification across industries. Accordingly, the fraction of portfolio companies which have a negative return or return nothing at all, increase with diversification across financing stages. Diversification across countries has no systematic effect on the performance of private equity funds

Forgotten Sources of Capital for the Family-Owned Business

The recent scandals on Wall Street in the banking and savings and loan industries have created a financial crisis for many family businesses, particularly those in smaller towns and cities. The long-standing personal relationships with financial intermediaries have been altered by the loss of these financial organizations and by heightened government intervention and regulation. To manage the finances of a family business successfully, the owners must reassess forgotten sources of capital for their businesses. This article examines these sources of capital for family businesses in the United States.Yeshttps://us.sagepub.com/en-us/nam/manuscript-submission-guideline