Is There a Size Disadvantage in the European Private Equity Market? Measuring the Impact of Committed Capital on Net Buyout Fund Returns

Sammanfattning: This paper investigates whether a size disadvantage exists in Private Equity. Previous literature that deals with fund level performance and fund size has largely found that performance declines with fund size, but has worked almost exclusively with US data. This paper hypothesises that the same conditions apply in Europe and also aims to compare the magnitude of the size disadvantage in Europe and North America. Using a unique and high-quality data set consisting of 406 European and 857 North American buyout funds, the results of a regression analysis confirm that a size disadvantage exists in Europe and also, surprisingly, that differences in performance between larger and smaller funds are more distinct in Europe than in North America.