Buchner, A, Mohamed, A orcid.org/0000-0002-2974-9467 and Schwienbacher, A (2020) Herd behaviour in buyout investments. Journal of Corporate Finance, 60. 101503. ISSN 0929-1199
Abstract
In this study, we explored the presence of correlated investment choices (i.e., herd behaviour) among international buyout funds by distinguishing among the contemporaneous and the following herding of smaller funds towards the top market players (i.e., the top quartile in terms of the fund size). In our analyses, we found that the industry herding towards the largest ones is common in private equity (PE) but mostly during market contractions or the deterioration of general market conditions. Moreover, we also found that as capital inflows into the PE industry slow down, herding occurs more often. This finding is consistent with the increasing competition for new capital fundraising in downturns, which can induce PE funds to herd more. We also found that both types of herding generate higher fund returns and lower risk for funds that are capable of herding. Additionally, we documented the persistence in herding.
Metadata
Item Type: | Article |
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Authors/Creators: |
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Copyright, Publisher and Additional Information: | © 2019 Elsevier B.V. All rights reserved. This is an author produced version of a paper published in Journal of Corporate Finance. Uploaded in accordance with the publisher's self-archiving policy. |
Keywords: | Herd behaviour; Buyout; Private equity; Performance; Risk |
Dates: |
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Institution: | The University of Leeds |
Academic Units: | The University of Leeds > Faculty of Business (Leeds) > Accounting & Finance Division (LUBS) (Leeds) |
Depositing User: | Symplectic Publications |
Date Deposited: | 24 Oct 2019 13:59 |
Last Modified: | 28 Feb 2021 01:38 |
Status: | Published |
Publisher: | Elsevier |
Identification Number: | 10.1016/j.jcorpfin.2019.101503 |
Open Archives Initiative ID (OAI ID): | oai:eprints.whiterose.ac.uk:152578 |