Assistant Professor’s Research on Private Equity Funds Analyzed by Institutional Investor
Jan. 10, 2020
Andrea Rossi, assistant professor of finance in the Eller College of Management at the University of Arizona, was cited in a January 7 Institutional Investor column on the science behind private equity fund growth.
The article explores Rossi’s most recent working paper, “Decreasing Returns or Reversion to the Mean? The Case of Private Equity Fund Growth”, which offers a new interpretation for why large private equity (PE) funds tend to underperform their preceding funds.
“’Analysis of the correlation between fund growth and performance at the PE firm level is likely to misinterpret simple reversion to the mean as being caused by fund growth,’” says the column in reference to Rossi’s research. “’High-growth private equity firms were on average lucky in the past and therefore are expected to experience reversion to the mean.’”
Andrea Rossi joined the Eller College of Management in 2018 after earning his PhD in Finance from Ohio State University. His areas of expertise include private equity, asset management, investor behavior and corporate insiders. He has also worked as a financial analyst for PFC consulting group and as a junior project manager for BNP Paribas.