We are delighted to share a new CEFS research paper draft 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). 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.
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.
For further insights, please have a look at the full paper here.