EIF Staff Paper, "The Risk Profile of Venture Capital Funds-of-Funds"

Abstract

The aim of this thesis is to analyse the risk profile of venture capital (VC) funds-of-funds. VC is generally associated with the investment in young, small, and fast growing companies in predominantly high-technology industries. Recent research has demonstrated that returns on VC investments are very volatile and investors have to bear a high level of risk. On the other hand, investors are compensated with high rates of returns to bear the risk inherent to investments in young high-technology companies. The VC industry is an opaque and illiquid market and data about risk and return of this asset class are relatively rare. Nonetheless, VC investments have seen large increases during the last years and achieved reputation within the segment of alternative investments.

• Diploma thesis written by former student Björn Born, who EIF's Division for Risk Management and Monitoring helped to supervise in 2003/2004.

Read the dissertation