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What Drives Private Equity Fund Performance in Emerging Markets

Zhang, Naidan LU (2025) NEKN02 20251
Department of Economics
Abstract
Based on a sample of 591 emerging market private equity funds from the Preqin database, this
paper investigates the relationship between fund structural characteristics and relative
performance. Benchmark-adjusted internal rate of return (BAIRR) is used to measure
performance, and a cross-sectional regression model is constructed with fund size, GP
experience, investment strategy, and investment region as explanatory variables. The results
show that fund size and GP experience are significantly negatively correlated with relative
performance, supporting diminishing returns to scale and path dependence hypotheses. Growth
strategy funds outperform VCs and Buyouts. There are also substantial differences between
regions, with... (More)
Based on a sample of 591 emerging market private equity funds from the Preqin database, this
paper investigates the relationship between fund structural characteristics and relative
performance. Benchmark-adjusted internal rate of return (BAIRR) is used to measure
performance, and a cross-sectional regression model is constructed with fund size, GP
experience, investment strategy, and investment region as explanatory variables. The results
show that fund size and GP experience are significantly negatively correlated with relative
performance, supporting diminishing returns to scale and path dependence hypotheses. Growth
strategy funds outperform VCs and Buyouts. There are also substantial differences between
regions, with Africa outperforming Asia, and Latin America being the weakest. (Less)
Please use this url to cite or link to this publication:
author
Zhang, Naidan LU
supervisor
organization
course
NEKN02 20251
year
type
H1 - Master's Degree (One Year)
subject
keywords
Private Equity Fund, Emerging Markets, Fund Performance, Investment Strategy
language
English
id
9193938
date added to LUP
2025-09-12 10:47:11
date last changed
2025-09-12 10:47:11
@misc{9193938,
  abstract     = {{Based on a sample of 591 emerging market private equity funds from the Preqin database, this 
paper investigates the relationship between fund structural characteristics and relative 
performance. Benchmark-adjusted internal rate of return (BAIRR) is used to measure 
performance, and a cross-sectional regression model is constructed with fund size, GP 
experience, investment strategy, and investment region as explanatory variables. The results 
show that fund size and GP experience are significantly negatively correlated with relative 
performance, supporting diminishing returns to scale and path dependence hypotheses. Growth 
strategy funds outperform VCs and Buyouts. There are also substantial differences between 
regions, with Africa outperforming Asia, and Latin America being the weakest.}},
  author       = {{Zhang, Naidan}},
  language     = {{eng}},
  note         = {{Student Paper}},
  title        = {{What Drives Private Equity Fund Performance in Emerging Markets}},
  year         = {{2025}},
}