As the world emerges from one of the biggest—nancial crises in history, the list of causative factors for the global bubble that preceded it becomes clear. A lack of transparency in the investment markets, a rush to illiquid assets and a glorification of aggressive investment strategies are some of those factors. If we can learn anything from the crisis, it definitely includes that many of the largest and most important investors knew too little about how to deal with investments outside the classic, public sk markets. Indeed, investments in illiquid Private Equity (PE) and Venture Capital (VC) funds have played a significant role in many seemingly low-risk, high-return investment strategies, even though investors in these funds had few guidelines from academics or regulators on how to treat this asset class. This is unfortunate, not only because these funds play a crucial role in the—nancing of non-public companies – e.g. the essential—nancing of many in- vative start-up—rms or the capital investments in so many non-public medi- sized companies. The lack of analysis is also regrettable, since economically important investors, e.g. pension funds or insurances, seek to diversify their investments. But only few studies have empirically analyzed how investors choose and invest in PE and VC funds. Daniel Hobohm helps to fill this - search gap with his doctoral thesis.