INVESTING/PORTFOLIO STRATEGIES

Markowitz prize awarded to paper studying private equity returns vs. public equity

Harry Markowitz

Robert S. Harris, Tim Jenkinson and Steven N. Kaplan were named winners of the $10,000 Harry M. Markowitz Award for their paper, “How Do Private Equity Investments Perform Compared to Public Equity?”

The award was announced Thursday by the Journal of Investment Management and New Frontier Advisors in a joint statement.

The paper used cash flow data derived from almost 300 institutional investor holdings to study more than 1,800 buyout and venture capital funds in North America, according to an abstract on the paper.

Among the findings of the paper were that buyout funds outperformed public equities in every year except one before 2006, while vintage-year returns after that have been roughly equal. Venture capital performance has varied over time, the abstract said.

Mr. Harris is the C. Stewart Sheppard Professor at the Darden School of Business at the University of Virginia; Mr. Jenkinson is professor of finance at the Said Business School at Oxford University; and Mr. Kaplan is a Neubauer Family Distinguished Service Professor of Entrepreneurship and Finance at the University of Chicago Booth School of Business.

The awards, which recognize the impact of Mr. Markowitz’s work as a financial economist and mathematician in both theoretical and applied finance, are sponsored by New Frontier and the JOIM. Winners were selected by a panel of Nobel laureates in economics, consisting of Mr. Markowitz, Robert C. Merton, Myron S. Scholes and William F. Sharpe.