New Study: Sov Wealth Funds are Sheep
Several years ago, academics Josh Lerner (Harvard) and Antoinette Schoar (MIT) published a paper about how LP returns are affected by the location of their general partners. Specifically, they found a negative proximity effect – that the PE portfolio performance of state pensions and public universities improved the farther away they invested from their home states. For example, UMass would do better if 70% of its GP commitments were to out-of-state funds, as opposed to if only 40% were. Why bring this up today? Because Lerner and Schoar have just released a new working paper on the direct investment strategies of sovereign wealth funds, which features a strikingly similar conclusion. From an email Lerner sent over:
31 March 2009•2 mins read
