What is the capital market segment

Capital market theoretical framework for characterizing the intermediary relationship

Risk-Adjusted Performance of Private Equity Investments pp 61-139 | Cite as


The performance in the private equity market segment basically follows the listed segment.164 The assumption of a high correlation between the two segments cannot be intuitively rejected and can also be illustrated by looking at various multipliers and indices.165 The indices to be observed indicate a leadership of the listed capital market. In a following chapter, however, it will be discussed that the index definitions and calculations show weaknesses in correctly representing the capital market segment. A direct comparison and a classification of the investment category in the capital market theoretical environment is not possible, especially due to a lack of available data.166 Furthermore, there is currently no theoretical framework for instructions for data evaluations based on capital market theoretical knowledge. It is precisely a goal defined for this work to present such a framework. The framework is based on the assumptions of neoclassical theory. However, the perfection and lack of friction of the market as assumptions of the neoclassical era are to be regarded as unrealistic prerequisites for the examined capital market segment. Nevertheless, the neoclassical findings provide the most suitable basis if the aim is to analyze risk / return relationships. An attempt is made to expand and also specify the basics through additions made in the meantime so that the willingness to accept the neoclassical theory of valuing private equity investments is increased.

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© Deutscher Universitäts-Verlag / GWV Fachverlage GmbH, Wiesbaden 2004

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