Trade Policy and Its Impact on Limited Partnership Commitments in Private Equity
Type
journal article
Date Issued
2025-03
Author(s)
Abstract
We examine how trade policy shapes the investments of U.S. public pension funds to private equity funds. Using a novel dataset of 1,824 foreign fund-level investments made by 129 U.S. public pension funds between 2009 and 2022, we link institutional capital allocation to trade distortions. Consistent with tariff-jumping behavior, U.S. public pension funds reduce foreign commitments when U.S. protectionist trade distortions rise, but increase them when protectionist trade distortions imposed by recipient countries intensify. We find limited evidence that industrial policy measures such as subsidies influence capital allocation decisions. Our results highlight how protectionist trade policy systematically shifts the geographic allocation of institutional capital by altering perceived investment conditions in foreign financial markets.
Language
English
Keywords
Private Equity
Public Pension Funds
Trade Policy
Protectionism
Industrial Policy
Geopolitics
Political Uncertainty
HSG Classification
contribution to scientific community
Refereed
No
Official URL
Subject(s)
Division(s)
File(s)![Thumbnail Image]()
Name
ssrn-5213634.pdf
Size
1.44 MB
Format
Adobe PDF
Checksum (MD5)
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