Articles

A Mathematical Turn in Business Regulation: The Rise of Legal Indicators

D. RESTREPO AMARILES

International Journal of Law in Context

Forthcoming


A primal condition for approachability with partial monitoring

S. MANNOR, V. PERCHET, G. STOLTZ

Journal of Dynamics and Games

Forthcoming

Departments: Economics & Decision Sciences, GREGHEC (CNRS)


Ambiguity and the Bayesian Approach

I. GILBOA, M. MARINACCI

Advances in Economics and Econometrics: Theory and Applications

Forthcoming

Departments: Economics & Decision Sciences, GREGHEC (CNRS)


Approval Voting and Arrow's Impossibility Theorem

P. MONGIN, F. MANIQUET

Social Choice and Welfare

Forthcoming

Departments: Economics & Decision Sciences, GREGHEC (CNRS)


Are Novice Private Equity Funds Risk-Takers? Evidence From a Comparison with Established Funds

P. GIOT, U. HEGE, A. SCHWIENBACHER

Journal of Corporate Finance

Forthcoming

Departments: Finance, GREGHEC (CNRS)


This paper explores whether private equity firms that are new to the industry take excessive risks relative to funds from established firms. We use differences between the implicit incentives of managers of experienced and of novice funds as an identification strategy. We find that novice funds invest more slowly than experienced funds, contradicting the risk-taking hypothesis. However, the size of their investments, in value and as fraction of fund size, is larger; this could be consistent with risk-shifting by novice funds but also with alternative hypotheses. We find that the size difference increases over time and is absent from buyout investments. We also find that novice funds tend to underperform most dramatically for early large investments, and that the size of their investments increases after a first successful exit. These and other findings are in conflict with the excessive risk-taking hypothesis, but largely consistent with alternative explanations that emphasize differences in expertise