Abstract Individuals increasingly buy mutual funds via online platforms, whose “best-buy” recommendations heavily influence flows. As intermediaries of mutual funds, platforms provide none of the unobservable interaction or intangible benefits of brokers, and so allow clean tests of the determinants, influence, and value of their fund recommendations. Using unique U.K. data, we find that platforms favor “own-brand” funds and those paying them a higher commission share. Investors discount own-brand recommendations, but not those paying high commission shares (which were not observable in the United Kingdom). A regulatory ban on commission sharing lowered costs and improved the informativeness of platform recommendations.

In this paper, we investigate the role of educational ties in private equity. Although we cannot observe all the funds that bid for a target company, we construct the set of potential bidders based upon their size and investment cycle, as well as the location and sector of their target companies. By gathering detailed educational histories of fund partners and CEOs of target firms, we find a significantly higher incidence of educational ties in completed deals than exists among the set of potential bidders. We argue that educational ties between fund managers and CEOs of target companies play a (positive) role in sourcing deals and winning competitive transactions. The alma maters of CEOs and private equity partners are notably concentrated among the top universities, and we find that exclusivity of educational ties is important. However, we find no evidence that such educational ties produce higher returns for investors.

Private equity performance, both for buyouts and venture capital, has been highly cyclical: periods of high fundraising have been followed by periods of low performance. Despite this seemingly predictable variation, we find modest gains, at best, to pursuing realistic, investable strategies that time capital commitments to private equity. This occurs, in part, because investors can only time their commitments to funds; they cannot time when commitments are called or when investments are exited. There is a high degree of time-series correlation in net cash flows even across commitment strategies that allocate capital in a very different manner over time.