Institutional Affiliation of General Partners and Private Equity Investment Choices

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Abstract
This article empirically investigates whether and how the institutional affiliation of the general partners in a private equity fund affects the fund’s choices of investment stage (seed and start-up venture capital versus later-stage expansion and buyout financing), industry, and geographical focus. Overall, the results show that compared to independent funds, bank-affiliated funds prefer expansion and buyout financing, whereas corporate subsidiaries favor start-up financing. Funds affiliated with the government and public organizations are less interested in late-stage ventures. The author finds little evidence of industry specialization by general-partner affiliation. Finally, corporate subsidiaries tend to invest globally. In contrast, funds affiliated with banks, the government, and public organizations have a more narrow geographical focus.status: publishe