A popular focus of research in the area of private equity (PE) portfolio management has been the quest for successful ex-ante identification of individual private equity funds (or “manager selection” within a portfolio). Outside of that, much of the existing research has mainly focused on...

This paper provides a new investment methodology for private equity portfolios that applies principles of investment management used in traditional asset classes. We apply Modern Portfolio Theory (MPT) with rational selection of portfolios that are on the efficient frontier of risk-reward...