These papers cover the fundamentals along with a number of other subjects of relevance to private equity investing. All papers are authored by Sand Hill Econometrics founder and chief economist, Susan Woodward, Ph.D., unless otherwise noted.
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Sand Hill Fundamentals
Dow Jones Venture Capital Index Handbook
This new white paper, a joint production of Dow Jones Indexes and Sand Hill Econometrics, details the process of creating the Dow Jones Index of Venture Capital, and the underlying econometric theory.
November 2010, 25 pp. (PDF 643 K)
Academic White Paper
“Benchmarking the Returns to Venture” (with Robert Hall, Ph. D.)
This version is for the more technical reader, one who is familiar with statistical topics such as regression and serial correlation, and describes in more detail how the index was built and the technical issues involved in the effort. This version covers the Sand Hill Index, and may be somewhat out of date but is still worth reading if you are interested in the subject of measuring betas. December 2003, 32 pp. (PDF 233K)
Other Private Equity-Related Papers
The Burden of the Undiversifiable Risk of Entrepreneurship (with Robert Hall, Ph. D.) Entrepreneurship is risky. We study the risk facing those backed by venture capital. We find that almost three-quarters of entrepreneurs receive nothing at exit and a few receive over a billion dollars .Because of the extreme dispersion of payoffs, an entrepreneur with a coefficient of relative risk aversion of two places a certainty equivalent value only slightly greater than zero on the distribution of outcomes she faces at the time of her company’s launch. AER, June 2010
GARP Magazine: Measuring Risk of Alternative Assets
Alternative assets present a variety of challenges to risk managers. Indeed,it is difficult to evaluate the risks of these complex instruments,particularly for assets that are illiquid and opaque. But there is hope. Dr. Susan Woodward provides a risk metrics-friendly blueprint for effective alternative assets measurement.
May/June 2005, 4 pp. (PDF 104 K)
Measuring Risk and Performance for Private Equity
This paper offers an approach to measuring risk and performance of assets in the two major sectors of private equity and discusses the implications. August 2009, 27 pp. (PDF 143 K)
Benchmarks for Alternative Assets
This article is an overview of the history and practice of benchmarking, and the various approaches private equity portfolio managers may be familiar with. 6 pp. (PDF 40 K)
Other Topics of Interest
Consumer Confusion In the Mortgage Market
In many ways the US mortgage market is highly efficient, but there is evidence that many borrowers are very confused by this complex transaction. July 2004, 52 pp. (PDF 256 K)
Regulatory Capture at the U.S. Securities and Exchange Commission
The SEC is not unique: It is just as captured by those it regulates as other Federal agencies. March 1998, 19 pp. (PDF 288 K)