Understanding Private Equity: A Comprehensive Market Analysis

This thesis presents an extensive market analysis of the private equity sector, with a particular focus on fund investing. The study begins with a detailed description of the PE sector, including the structure and life-cycle of PE funds, to provide foundational understanding nec- essary for the subsequent analyses. Later, I use rare data provided by CEPRES, a leading PE investment platform, to explore the various characteristics of the PE sector. I produce an analysis of my sample, checking geography, focus industry, and strategy for both fund and deal investing. Next, I use various risk and return variables to investigate different PE strategies. The strategies considered include Venture Capital, Lever- aged Buyout, Private Debt, Real Estate, and Distressed. A key component of the study is the comparison between fund and deal levels investments. Consistent with theoretical expectations, the analysis reveals that while the second investments exhibit higher risk, they also offer the potential for greater returns. In the final section, I compare private equity investments with public market investments, employing the Public Market Equivalent (PME) measure, a metric widely recommended in the literature for this case. Here, three major benchmarks, Nasdaq, MSCI, and S&P 500, are used to evaluate the performance of private equity against public markets.