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Comment by fludlight | Hacker News Reader

My initial thought is "yes, if you invest in the vintage immediately following a recession, let's see what the authors say". Then I am greeted with this fun paywall:

> You may purchase this paper on-line in .pdf format from SSRN.com ($5) for electronic delivery.

> You are eligible for a free download if you are a subscriber, a corporate associate of the NBER, a journalist, an employee of the U.S. federal government with a ".GOV" domain name, or a resident of nearly any developing country or transition economy.

A subscription in the US, where my tax dollars fund this work, is $2675/year for the whole body of work, or $705/year for just this subject.[1] WTF!?

So I googled the title and it's available for free, legally on SSRN[2]. Maybe change the post url to that?

[1] https://www.nber.org/wpsubscribe.html

[2] https://papers.ssrn.com/sol3/papers.cfm?abstract_id=3241102

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5 second search on Google Scholar returns the full PDF as the 1st result.

https://www.hhs.se/globalassets/swedish-house-of-finance/sem...

Link should be changed to full PDF

Red flag 1: Failure to cite relevant literature.

Red flag 2: Data vendor co-author.

1) There are equally credible claims that buyout funds are statistically indistinguishable from portfolios of highly leveraged small-caps + hold to maturity accounting [1].

2) PE studies based on the kind of data they used have major quality issues to overcome: a) NAV is mark to whatever your accountant that you pay says; b) GP's openly admit to using credit lines to time cashflows (and thereby manipulate IRR) [2].

A serious study based on LP nav/cashflow data needs to grapple with these issues. That means a well considered error-in-variables model. If memory serves me right, these authors basically just "back tested" a couple heuristic commitment strategies.

As a referee, I would raise these as serious questions about the work.

[1] https://papers.ssrn.com/sol3/papers.cfm?abstract_id=2639647

[2] https://www.institutionalinvestor.com/article/b1ft12gp9lsv00...

But I don't know you can time the recessions, think of everyone raising coming crisis distressed funds from 5 years ago, who ended up being forced to out the money to work in things like bank loans which now are getting wrecked.

And if you wait till after the carnage, by the time they can actually invest prices will have moved.

As someone on the other side... it sucks have to pay extra to publish in a journal supporting open access (if you don't do open access, publishing is cheaper)

Nonsense. You don't have to pay extra to post a copy on Medium, or one of the other 9 zillion free publishing platforms

That's actually really hard. Funds sometimes take 1+ years to raise, and then they can invest over a period of 2-4 years with capital committed for 10 years. Hard to time that

The full paper gives a another reason: if you decline to invest in one fund, the GP might not let you invest in the next one.

That is so hard to measure. Is undersizing a commitment to one vintage a black mark? I'm skeptical of that reasoning.

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