Abstract (EN)

We study the performance determinants of private equity investing in emerging markets (EM) compared todeveloped markets (DM) using a novel dataset. Using a multilevel linear model specification, our resultssuggest that performance in emerging markets in highly dependent on geographical and cultural proximity.The effect is significantly higher for GPs investing in both markets compared to pure DM- and EM-playersrespectively. Cross-cultural and geographical effects are enhanced when the GP investment teams are alsoculturally close using different measures. Our results also show that the realized returns are highly dependenton the investment period, the investment style and the GP’s experience on each market.