International Capital Flows into Private Equity Funds

In this study the investment behavior of US institutional investors in selecting private equity funds isanalyzed. The results show that, while this group of investors predominantly selected US funds, their interest in directly investing in foreign funds has increased over time. Insurance companies, financial corporations (banks), and public pension funds in the US are ‘global players’ that are likely to invest directly in foreign private equity funds. This conclusion holds for investments in European funds as well as for investments in Asia. More experienced funds providers are more likely to invest abroad, and when doing so they are more likely to invest in venture capital funds as opposed to buyout funds.