We are delighted to share that the new CEFS research paper titled “Limited Partners versus Unlimited Machines: Artificial Intelligence and the Performance of Private Equity Funds” authored by Prof. Reiner Braun (CEFS), Prof. Ludovic Phalippou (Oxford) and Prof. Florencio Lopez de Silanes (SKEMA) along with Dr. Borja Fernández Tamayo (SKEMA & Unigestion) and Natalia Sigrist (Unigestion) will be presented at the 2nd Columbia Private Equity five-paper conference. The conference is held on February 29th and March 1st in New York City (USA) on the Columbia Business School campus. More info about the conference can be found here.
In this paper, the authors analyze quantitative and qualitative information from private equity (PE) fund prospectuses to understand fund performance and fundraising success. Employing econometric methods and machine learning techniques they find that PE fund performance is unrelated to quantitative information and that measures of fundraising success are correlated to most fund characteristics but are not related to future performance. Also, machine learning tools can use qualitative information to predict future fund performance.
The paper has already been featured in the press by the Financial Times (subscribers can access their article here) and Institutional Investor (article can be accessed here) for instance. Moreover, it has been presented recently at the American Finance Association (AFA) annual meeting in San Antonio (USA).
For further insights, please have a look at the full paper here.