Growth and Performance of Private Equity and Venture Capital Activity in Emerging Markets

Abstract

Abstract The fast-growing private equity (PE) and venture capital (VC) activities in emerging markets increase the ratio of a firm’s investment-to-staff, which raises the question of whether the growth in the investments’ number will negatively impact a fund’s performance. We analyzed data at the deal level in Brazil, where the industry is relatively young but has raised a significant amount of capital. The results indicate that a higher number of deals reduces the probability of total loss for both PE and VC. However, when we exclude total losses, we find that it has a negative effect on PE deals but not VC deals.