Portfolio Strategies of Private Equity Firms: Theory and Evidence (Innovation und Entrepreneurship)

Driven by the convergence of international financial public markets, investors around the globe are searching for alternative asset classes which enable diversification of their portfolios while earning attractive returns. Private equity, denominating equity investments in privately held companies, promises to meet both criteria. As a result, over the last three decades, private equity has become an important ingredient in the portfolios of insitutional investors such as banks, insurance companies, and pension funds.