Return to search

PE Firms: Josh Lerner Wants Your Data

Josh Lerner will discuss more details of his nascent non-profit research project, the Private Capital Research Institute, during his talk at Super Return in Berlin next Wednesday, the Jacob H. Schiff Professor at Harvard Business School told Buyouts.

Lerner started organization last April to provide academics with more data in order to produce unbiased research into the pros and cons of investing by buyout and venture capital firms, as well as angel investors and sovereign wealth funds.

You might remember Lerner generated headlines in 2008 with his widely circulated study, “The Economic Impact of Private Equity.” The study basically found that while private equity-backed companies tend to shed certain jobs initially, they also tend to add other jobs during the private equity firm’s ownership, basically evening out headcount.

“Today, there are a number of databases, each with their strengths and weaknesses, and its probably fair to say that for most professors and grad studs it’s hard to get access to that data,” Lerner said. “We’re doing this to try to accelerate the development of research and knowledge about private capital in a way that’s not just good for academics but for industry about what works and doesn’t work.”

Lerner and a research director for the last few months have started reaching out to at least “several dozen” general partners, limited partners, data vendors and other industry participants about sharing data for the project. The idea is to assemble a mass database consisting of fund performance and transaction details—who invested how much, where and when.

Unfortunately for reporters, all of the data will be anonymous and closely guarded by Institute staff; the institute also is looking to partner with an academic institution that has worked with secure data in the past, Lerner said. “This is not a case of putting this up on the Web for everyone to see. There would be limited access for researchers.”

While the institute aims to provide academics with more unbiased data, Lerner said he expects it ultimately will be able to dispel any misconceptions about private equity, be they good or bad. “The industry would benefit from more objective, dispassionate research by people who don’t have an ax to grind against the industry.”

He said he expects the institute to begin its first study later this year.

The Ewing Marion Kauffman Foundation is funding the institute. The institute also is affiliated with the Brookings Institution, with which it will focus on various kinds of outreach events with policy makers and industry participants. Lerner stressed this would not be lobbying for the industry, but rather “fact-based education” about it.

The main focus of Lerner’s discussion at Super Return next week will be on the state of GP/LP relationships, he said.