Nan Zhang

State Street Global Exchange
140 Mt Auburn Street
Cambridge, MA 02138
United States

E-Mail: EmailAddress: hidden: you can email any NBER-related person as first underscore last at nber dot org
Institutional Affiliation: State Street Global Exhange

NBER Working Papers and Publications

August 2018Investing Outside the Box: Evidence from Alternative Vehicles in Private Capital
with Josh Lerner, Antoinette Schoar, Jason Mao: w24941
This paper undertakes a comprehensive analysis of alternative investment vehicles in private equity, using unexplored custodial data about 112 limited partners over four decades. We differentiate between alternative vehicles that are GP-directed versus those where the LP has some discretion. Of the roughly 5500 distinct investments made by the LPs in our sample, 32% of investments (17% of capital commitments) were in such alternative vehicles; the allocation increased by more than 10 percentage points over the last decade. Alternative vehicles were far more likely to be offered by larger and North America-based buyout funds. The average performance of these alternative vehicles lagged that of the GPs’ corresponding main funds. The best LP performance was among endowments, private pensions,...

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