Does the tenure of Private Equity investment improve the performance of European firms?
نویسندگان
چکیده
The paper investigates whether the presence and tenure of Private Equity (PE) investment in European companies improves their performance. Previous studies documented the unambiguous merit of a buyout during the 1980s and 1990s for listed firms in the US and UK markets. This study analyzes such influences in both listed and unlisted European firms during 2002−2007. Our analysis suggests that shortterm PE investments have, on average, a detrimental effect on firm performance. The performance of a firm that has PE backing is lower than that of a firm without PE backing in the first year of PE investment. Such an effect disappears if PE investments remain in the firm for an uninterrupted six-year term.
منابع مشابه
Learning and the Return to Private Equity
This paper suggests a solution to the puzzling finding documented in Moskowitz and Vissing-Jorgensen (2002) that the return to an index of private equity is equal to the return to the CRSP index of public equity even though investment in private firms is substantially riskier. It presents an occupational choice model where human and financial capital can be jointly invested in a private busines...
متن کاملارائه مدل تعیین میزان مخارج سرمایهای در شرکتهای پذیرفته شده در سازمان بورس اوراق بهادار تهرانبا استفادهاز اطلاعات حسابداری
Financing strategy in corporations is one of the most important subject matters among accounting and finance scholars. Investment in companies to increase profitability is one of the important purposes of financing activities. Different methods for execution of financing activities include: Internal finance, external finance and combination of these two. The problem is that whether there is...
متن کاملPrivate Equity Investment in India: Efficiency vs Expansion
While private equity (PE) is expanding rapidly in developing countries, there is little academic research on this subject. In this paper I exploit two new data sources and employ two distinct empirical strategies to identify the impact of PE on Indian firms. I compare the investments made by one of India’s largest PE firms to the investments that just missed (deals that made it to the final rou...
متن کاملThe First-Time in Private Equity: Does Experience Help to Raise Capital?
Compared to mature investment firms, first-time funds in private equity lack an investment and performance track record, and require alternative signals to establish initial trust with investors. The paper finds that investors allocate more capital to first-time funds if they have a higher share of managers with relevant experience, such as from another private equity group or a bank. In partic...
متن کاملDeveloping revised Fama-French Five-Factor models by including dividend rate, cash holdings, and Free cash flow to equity: evidence of Tehran stock exchange
Prediction of stock returns has always been one of the most important issues in finance. Investors have attracted to use of Fama-French Five-Factor Model (FFFFM) as one of the powerful methods for pricing financial assets and predicting the stock returns. This research investigates the predictability of stock returns by including some important firms features namely cash holdings, dividend rate...
متن کامل