Pay for performance from future fund flows: The case of private equity

Review of Financial Studies

Volumn 25, Issue 11, 2012, Pages 3259-3304

  Chung, Ji Woong ^a   Sensoy, Berk A ^b   Stern, Léa ^b   Weisbach, Michael S ^b,c  

^a Korea University   (South Korea)

^b OHIO STATE UNIVERSITY   (United States)

^c NATIONAL BUREAU OF ECONOMIC RESEARCH   (United States)

Author keywords

[No Author keywords available]

Indexed keywords

EID: 84867750818     PISSN: 08939454     EISSN: 14657368     Source Type: Journal    
DOI: 10.1093/rfs/hhr141     Document Type: Review

References (42)

1. Ai, C., and E. Norton. 2003. Interaction Terms in Logit and Probit Models. Economics Letters 80:123-29. (Pubitemid 36598410)
2. Alter, A. 2009. The Organization of Venture Capital Firms. Working Paper, Washington University.
3. Berk, J., and R. Green. 2004. Mutual Fund Flows and Performance in Rational Markets. Journal of Political Economy 112:1269-1295. (Pubitemid 40106863)
4. Chevalier, J., and G. Ellison. 1997. Risk-taking by Mutual Funds as a Response to Incentives. Journal of Political Economy 105:1167-1200. (Pubitemid 127632316)
5. - 1999. Career Concerns of Mutual Fund Managers. Quarterly Journal of Economics 114:389-432.
6. Chung, J. 2010. Performance Persistence in Private Equity Funds. Working Paper, Chinese University of Hong Kong.
7. DeGroot, M. H. 1970. Optimal Statistical Decisions. New York: MacMillan.
8. Driessen, J., T. Lin, and L. Phalippou. Forthcoming. A New Method to Estimate Risk and Return of Non-traded Assets from Cash Flows. Journal of Financial and Quantitative Analysis.
9. Fama, E. F. 1980. Agency Problems and the Theory of the Firm. Journal of Political Economy 88:288-307.
10. Frazzini, A., and O. Lamont. 2008. Dumb Money: Mutual Fund Flows and the Cross-section of Stock Returns. Journal of Financial Economics 88:299-322.
11. Frydman, C., and D. Jenter. 2010. CEO Compensation. Annual Review of Financial Economics 2:75-102.
12. Gibbons, R., and K. J. Murphy. 1992. Optimal Incentive Contracts in the Presence of Career Concerns: Theory and Evidence. Journal of Political Economy 100:468-505.
13. Gompers, P. 1996. Grandstanding in the Venture Capital Industry. Journal of Financial Economics 42: 133-56. (Pubitemid 126164505)
14. Gompers, P., and J. Lerner. 1998. What Drives Venture Capital Fund-raising? Brookings Papers on Economic Activity - Microeconomics, 149-92.
15. - 1999. An Analysis of Compensation in the U.S. Venture Capital Partnership. Journal of Financial Economics 51:3-44.
16. Greene, W. H. 2000. Econometric Analysis, 4th ed. Upper Saddle River, NJ: Prentice Hall.
17. Hall, B., and J. Liebman. 1998. Are CEOs Really Paid Like Bureaucrats? Quarterly Journal of Economics 113:653-91.
18. Han, B., D. Hirshleifer, and J. Persons. 2009. Promotion Tournaments and Capital Rationing. Review of Financial Studies 22:219-55.
19. Harris, R., T. Jenkinson, and R. Stucke. 2010. A White Paper on Private Equity Data and Research. Working Paper, UAI Foundation Consortium.
20. Hermalin, B. E., and M. S. Weisbach. 1998. Endogenously Chosen Boards of Directors and Their Monitoring of Management. American Economic Review 88:96-118. (Pubitemid 128452330)
21. - Forthcoming. Information Disclosure and Corporate Governance. Journal of Finance.
22. Hochberg, Y., A. Ljungqvist, and A. Vissing-Jorgensen. 2010. Informational Hold-up and Performance Persistence in Venture Capital. Working Paper, Northwestern University and New York University.
23. Holmstrom, B. 1999. Managerial Incentive Problems: A Dynamic Perspective. Review of Economic Studies 66:169-82.
24. Hong, H., and J. Kubik. 2003. Analyzing the Analysts: Career Concerns and Biased Earnings Forecasts. Journal of Finance 58:313-51. (Pubitemid 37311737)
25. Ippolito, R. 1992. Consumer Reaction to Measures of Poor Quality: Evidence from the Mutual Fund Industry. Journal of Law and Economics 35:45-70.
26. Jensen, M. C. 1989. The Eclipse of the Public Corporation. Harvard Business Review 67:61-74.
27. Jensen, M. C., and K. J. Murphy. 1990. Performance Pay and Top-management Incentives. Journal of Political Economy 98(2):225-64.
28. Kaplan, S. N., and A. Schoar. 2005. Private Equity Performance: Returns, Persistence, and Capital Flows. Journal of Finance 60:1791-1823.
29. Kaplan, S. N., and P. Strömberg. 2009. Leveraged Buyouts and Private Equity. Journal of Economic Perspectives 23:121-46.
30. Korteweg, A., and M. Sorensen. 2010. Risk and Return Characteristics of Venture Capital-backed Entrepreneurial Companies. Review of Financial Studies 23:3728-3772.
31. Lazear, E. P., and S. Rosen. 1981. Rank-order Tournaments as Optimum Labor Contracts. Journal of Political Economy 89:841-64.
32. Lerner, J., A. Schoar, and W. Wongsunwai. 2007. Smart Institutions, Foolish Choices? The Limited Partner Performance Puzzle. Journal of Finance 62:731-64.
33. Leslie, P., and P. Oyer. 2009. Managerial Incentives and Value Creation: Evidence from Private Equity.Working Paper, Stanford University.
34. Metrick, A., and A. Yasuda. 2010. The Economics of Private Equity Funds. Review of Financial Studies 23:2303-2341.
35. - 2011. Venture Capital and the Finance of Innovation. New York: Wiley & Sons.
36. Phalippou, L. 2010. Venture Capital Funds: Flow-performance Relationship and Performance Persistence. Journal of Banking and Finance 34:568-77.
37. Phalippou, L., and M. Zollo. 2005. What Drives Private Equity Performance? Working Paper, University of Amsterdam.
38. Robinson, D., and B. Sensoy. 2011a. Cyclicality, Performance Measurement, and Cash Flow Liquidity in Private Equity. Working Paper, Duke University and Ohio State University.
39. - 2011b. Do Private Equity Fund Managers Earn Their Fees? Compensation, Ownership, and Cash Flow Performance. Working Paper, Duke University and Ohio State University.
40. Rosen, S. 1986. Prizes and Incentives in Elimination Tournaments. American Economic Review 76:701-16.
41. Sensoy, B. 2009. Performance Evaluation and Self-designated Benchmark Indexes in the Mutual Fund Industry. Journal of Financial Economics 92:25-39.
42. Woodward, S., and R. Hall. 2003. Benchmarking the Returns to Venture. Working Paper, Stanford University.