Year-end Sale % OFF 
Abstract
We analyze how private equity funds sell down their stakes in companies they take public. The average duration of post-IPO holdings is 3 years, whereas lockups expire after 6 months. PE-backed IPOs perform well during the lockup, but we find no evidence that GPs add value for investors through the timing or speed of their sell-down strategies. GPs appear reluctant to sell losers, which is consistent with behavioral biases or fear of litigation. Faster sell-down strategies could have saved investors around $3.5bn in management fees alone. We discuss how, in the future, stock distributions followed by Direct Listings could significantly increase net returns to LPs.
Talk to us
Join us for a 30 min session where you can share your feedback and ask us any queries you have
Schedule a callDisclaimer: All third-party content on this website/platform is and will remain the property of their respective owners and is provided on "as is" basis without any warranties, express or implied. Use of third-party content does not indicate any affiliation, sponsorship with or endorsement by them. Any references to third-party content is to identify the corresponding services and shall be considered fair use under The CopyrightLaw.
