International Allocation Determinants of Institutional Investments in Venture Capital and Private Equity Limited Partnerships

in International Journal of Banking, Accounting and Finance, 3 (2/3)

ISSN : 1755-3830

Groh, Alexander (19..-....) ; Liechtenstein, Heinrich von

Voir la revue «International Journal of Banking, Accounting and Finance»

We examine the determinants of institutional investors when deciding about international capital allocation in venture capital and private equity limited partnerships through a questionnaire addressed to limited partners world-wide. The respondents provide information about their criteria for international asset allocation. The protection of property rights is the dominant concern, followed by the need to find local quality general partners, and the quality of management and skills of local ... entrepreneurs. Furthermore, the expected deal flow plays an important role in the allocation process, while investors fear bribery and corruption. Public funding and subsidies are not important for the international allocation process. Hence, private money does not follow public money. Additionally, IPO activity and the size of local public equity markets are not as relevant as proposed by other researchers. Our results can support policymakers to increase the attractiveness of their countries for institutional investors to receive more risk capital for innovation, entrepreneurship, employment and growth.

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