Private equity funds: the cost of cashing out

Private equity funds are usually illiquid for invested limited partners over a fixed period of time. But, as the Global Crisis has shown, sometimes partners may need to cash out early. Enrique Schroth discusses how the cost of doing so, in terms of the discount partners pay on their investment, can be substantial. One quarter to one third of the variation in the discount paid for an early exit can be attributed to the amount of liquidity in the economy.

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Topics:  Financial markets Financial regulation and banking

Tags:  private equity, early exit, investment, limited partners

Enrique Schroth

Professor at Cass Business School

Events

  • China Economics Summer Institute (CESI)
    17 - 18 August 2019 / Peking University, Beijing / Chinese University of Hong Kong – Tsinghua University Joint Research Center for Chinese Economy, the Institute for Emerging Market Studies at Hong Kong University of Science and Technology, the Guanghua School of Management at Peking University, the Stanford Center on Global Poverty and Development at Stanford University, the School of Economics and Management at Tsinghua University, BREAD, NBER and CEPR
  • CALL FOR PAPER - Vienna Symposium on Foreign Exchange Markets
    19 - 20 August 2019 / Vienna, Palais Coburg / WU Research Institute for Capital Markets (ISK)
  • SALENTO MACRO MEETINGS 2019
    29 - 30 August 2019 / Galatina, Italy /
  • Sustainable Development Conference 2019
    4 - 5 September 2019 / Roma Eventi, Congress Center, Pontificia Università Gregoriana Piazza della Pilotta, 4, Rome, Italy / European Center of Sustainable Development , CIT University
  • CIMS Summer School and Conference 2019
    9 - 14 September 2019 / Guildford, Surrey, UK / The University of Surrey

CEPR Policy Research