Performance Persistence in Private Equity: Skill, Structure, and Statistical Artefacts

This paper reviews the empirical literature on performance persistence in private equity (PE). It argues that observed persistence reflects three interacting forces: managerial skill, structural advantages, and measurement artefacts. It compares findings across return metrics, units of analysis, datasets, geographies, and time periods, with attention to biases from cash flow timing, fund overlap, and selective reporting. The review finds a genuine skill component, especially in venture capital, but shows that persistence estimates often weaken under stricter methods and richer data. Implications are drawn for fund selection, performance evaluation, and future research design.