This article analyzes a Preqin sample of 413 European private equity funds active from 2000 to 2021 to identify key determinants of fund performance and fund duration. Applying ordinary least squares models for cross-sectional analysis, we find that buyout specialization enhances various return metrics, such as internal rate of return, equity multiple, and total value to paid-in. We also find that the effect of fund series on duration is negative, challenging the notion that track record alone drives success. Utilizing an accelerated failure time model, the analysis demonstrates that both industry specialization and fund series are associated with shorter fund durations, which may indicate investor trust in managerial capabilities over extended periods, as recurring investors continue to provide capital. Our findings also reveal that superior fund performance correlates with longer fund lifetimes, supporting the view that managers maximize value by extending fund duration. The study underscores the need for improved data transparency in European private equity research.
Bossauer et al. (Tue,) studied this question.