New article on risk of PE in volatile times
mcp published an article “Systematic risk of private equity in volatile times” in the German asset management journal "Absolut Report". Christian Diller and Christoph Jäckel extended their BVCA risk study with more detailed analyses on risk differences between various vintage years and investment types; mainly the difference between buyout and venture funds have been analysed. While diversification works really well for buyout fund, a pure diversification strategy in venture capital lacks behind and timing of investment and exit as well as manager selection is key. In addition, the analyses show that vintage year diversification is the most important factor to reduce risk in an overall portfolio.