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No. of Recommendations: 7

Updating History

Rüdiger Stucke

University of Oxford
December 1, 2011

The Thomson VentureXpert database has been used for over two decades by practitioners and academics to benchmark and judge the performance of private equity and venture capital. A closer look at aggregated and individual figures, however, reveals severe anomalies in the underlying data which are the result of ceasing data updates. Since existing errors have a systematic and persistent character, they do not just increase noise but result in a significant downward bias of presented performances. Consequently, many empirical results established using this database may not be replicable with correct data. In particular, the claim that private equity has not outperformed public equity is unlikely to hold with true numbers.

Number of Pages in PDF File: 44"

Shows that the database used is missing ~40% of the required data. Missing over 50% of the data on Funds past Year 7.
Gives examples of prior analysis using 9% of the IRR for a fund when it was 18% in reality.

Shows one study that estimated funds underperforming by 7% from 1980-95 actually outperformed by 10%. Etc.
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