TY - JOUR
T1 - Information Asymmetries in Private Equity
T2 - Reporting Frequency, Endowments, and Governance
AU - Johan, Sofia
AU - Zhang, Minjie
N1 - Acknowledgements
Sofia Johan is at the College of Business, Florida Atlantic University and Minjie Zhang is at the Odette School of Business, University of Windsor. The authors thank Omrane Guedhami, Douglas Cumming, Michael Ewens, Zhenyu Wu, Andrej Gill, Iness Aguir, Marcel Grupp, Kevin Young and Oleg Gredil for their very helpful comments.
Funding
Sofia Johan thanks the Social Sciences and Humanities Research Council of Canada and Phil Smith Center for Free Enterprise for financial support.
PY - 2020/6/27
Y1 - 2020/6/27
N2 - Using PitchBook’s private equity (PE) database of 4548 PE funds from 42 countries for the 2000 to 2012 period, we find that higher reporting frequency is associated with lower information asymmetry in performance reports from general partners (GPs) to limited partners. We also find that endowments are systematically associated with less reported unrealized returns as a percentage of total returns generated from GPs. Moreover, endowments receive more performance reports from their PE funds, implying more stringent governance. These findings persist after controlling for various institutional and GP characteristics and are robust to several adjustments for endogeneity concerns. This study also contributes to the finance, accounting, and business ethics literature on financial reporting quality.
AB - Using PitchBook’s private equity (PE) database of 4548 PE funds from 42 countries for the 2000 to 2012 period, we find that higher reporting frequency is associated with lower information asymmetry in performance reports from general partners (GPs) to limited partners. We also find that endowments are systematically associated with less reported unrealized returns as a percentage of total returns generated from GPs. Moreover, endowments receive more performance reports from their PE funds, implying more stringent governance. These findings persist after controlling for various institutional and GP characteristics and are robust to several adjustments for endogeneity concerns. This study also contributes to the finance, accounting, and business ethics literature on financial reporting quality.
KW - private equity
KW - endowments
KW - financial reporting
KW - law and governance
KW - culture
UR - https://rdcu.be/b5iUR
UR - http://www.scopus.com/inward/record.url?scp=85087308637&partnerID=8YFLogxK
U2 - 10.1007/s10551-020-04558-6
DO - 10.1007/s10551-020-04558-6
M3 - Article
JO - Journal of Business Ethics
JF - Journal of Business Ethics
SN - 0167-4544
ER -
