The GP-LP Conflict in Private Equity Funds Revisited: The Impact of Fund-Level Considerations on the Divestment Decision

2012 ◽  
Author(s):  
Christian Figge ◽  
Oliver Bauer ◽  
Reiner Braun ◽  
Ann-Kristin Achleitner
Keyword(s):  
Private Equity ◽  
Equity Funds ◽  
Private Equity Funds ◽  
The Impact

scholarly journals ASSESSMENT OF THE INVESTMENT PROJECT EFFECTIVENESS FOR THE ACQUISITION OF COMPANIES BY THE DIRECT INVESTMENT FUND

2020 ◽  
pp. 164-171
Author(s):  
G. G. Utenov
Keyword(s):  
High Performance ◽  
Private Equity ◽  
Investment Project ◽  
Operational Efficiency ◽  
Investment Fund ◽  
Investment Projects ◽  
Private Equity Fund ◽  
Equity Funds ◽  
Private Equity Funds ◽  
The Impact

The performance of investment projects in acquisitions of companies by private equity funds has been explored by assessing the financial and valuation results of such transactions in two directions: change in the valuation multiple of an acquired company over the period of the investment project and the impact of a fund on a company’s operational efficiency. As a result of the analysis, the hypothesis of the higher EV/EBITDA exit multiple of the private equity fund compared to the same entry multiple was not confirmed. However, the hypothesis that private equity funds are able to increase the operational efficiency of portfolio companies on average better than other types of investors, confirms the effectiveness of private equity funds and high performance of such investment projects.

scholarly journals The Impact of the Subprime Crisis on the Course

Equilibrium ◽  
2011 ◽  
Vol 6 (2) ◽  
pp. 7-22 ◽  
Author(s):  
Alina Gorczyńska
Keyword(s):  
Mergers And Acquisitions ◽  
Private Equity ◽  
Developed Countries ◽  
Subprime Crisis ◽  
Equity Funds ◽  
Noticeable Improvement ◽  
Private Equity Funds ◽  
Reducing Costs ◽  
The Developed Countries ◽  
The Impact

The subprime crisis limited the investment activities of economic entities. The manifestation of the crisis was the decrease in the quantity and value of cross-border consolidation processes. These trends were especially visible in the developed countries. The main reasons for the reduction of mergers and acquisitions were the restrictions of access to external capital due to the collapse of stock markets, banks crash, the decline of private equity activity and decrease of the financial health of businesses as well as market pessimism. In addition to reduction and therefore cancellation of several mergers and acquisitions, these factors forced certain actions upon the consolidating companies. Among other things, they led to restructuring activities aimed at reducing costs. They also contributed to a number of divestments. Since the second half of 2009, there has been a noticeable improvement of the financial situation of enterprises, as well as of general economic indicators (GDP). However, these phenomena are still accompanied by unregulated financial markets situation, inter alia, concerning the regulation limiting the emergence of financial crises, including relation to the activities of private equity funds. Therefore, it is difficult to determine whether the period of crisis in relation to transactions of consolidation is over, and if we can talk about recovery in the course of these processes.

scholarly journals The Role of the Polish Private Equity Sector in the CEE Region

2019 ◽  
pp. 131-142
Author(s):  
Jacek Grzywacz ◽  
Ewa Jagodzińska-Komar
Keyword(s):  
Private Equity ◽  
Western Europe ◽  
Early Stage ◽  
Developed Countries ◽  
Equity Market ◽  
Growth Potential ◽  
Equity Funds ◽  
Private Equity Funds ◽  
The Impact

The aim of the article is to analyse the position of the Polish private equity sector as a leading player in the CEE region and to assess the impact of these funds on economic development. It has been pointed out that the fund sector is operating in an increasingly unpredictable environment (which could be seen during the financial crisis) and operates based on demanding regulations and growing risk. The paper presents the role of private equity funds in the CEE region, which by 2004 had seen a noticeably faster growth than in Western Europe, due to the transition to a market economy. The Polish private equity market in the CEE region was further analysed, which as the largest economy in the CEE region is a very attractive place for investors. The conclusions and directions of the role of private equity funds were presented, and it was emphasised that Poland and the whole CEE region are at an early stage of their market development, but their distance to Western Europe decreases from year to year. Currently, the CEE private equity market in the most developed countries offers great opportunities to its investors thanks to high competition, high growth potential and comprehensive solutions.

scholarly journals Impact of Private Equity in Colombian Companies: A Case Study

2018 ◽  
Vol 4 (3) ◽  
pp. 68-73
Author(s):  
Lina Maria Maya Toro ◽  
Manuela Gallon Bedoya
Keyword(s):  
Private Equity ◽  
Stock Exchange ◽  
Private Capital ◽  
Investment Fund ◽  
Capital Investments ◽  
Private Equity Fund ◽  
Professional Managers ◽  
Equity Funds ◽  
Private Equity Funds ◽  
The Impact

Abstract A private equity fund is an investment vehicle managed by a professional team, whose main objective is to provide a medium or long-term return to its investors through capital investments in companies that are not listed on the stock exchange. In Colombia the first professional managers of private equity funds arrived in 2005, Since that date, several companies have been formed dedicated to this, such as Valorar Futuro, an investment fund which bought Aderezos and Higietex. The aim of this research was to determine the impact of the leverage of a private capital fund on the economic growth of a company. Financial balances of the companies Aderezos and Higietex were obtained from 2013 to 2017 and analyzed. Finally, it was found that the private capital fund allowed growth in the companies Aderezos and Higietex.

Cycle on the Warsaw Stock Exchange and the level of underpricing of venture capital and private equity funds over 2000-2013

2017 ◽  
Vol 18 (1) ◽  
pp. 0-0
Author(s):  
Piotr Zasępa
Keyword(s):  
Venture Capital ◽  
Initial Public Offering ◽  
Private Equity ◽  
Stock Exchange ◽  
Development Fund ◽  
Public Market ◽  
Equity Funds ◽  
Warsaw Stock Exchange ◽  
Private Equity Funds ◽  
The Impact

Investments of venture capital and private equity funds are made in young fast growing companies whose founders are characterized by a lack of capital for their development. Fund investment cycle is assumed to follow the process of divestment after a period of rapid growth and dynamic growth of the company. One of the methods used willingly completion of the investment by the funds is to put the company on the stock exchange. It is quite a long and expensive process, however, that the valuation of the fund may obtain a public market is often the highest possible. The process has, however, affected by the condition of the public market and current trends in the market for initial public offering. This is also reflected in the so-called underpricing of the offer or the difference between the opening and closing of the first day of trading of the company. This article aims to analyze the impact of trends on the stock exchange on the level of underestimation of the value of the transaction IPO on the Warsaw Stock Exchange in the period 2000-2013.

Equilibrium liquidity premia of private equity funds

2016 ◽  
Vol 17 (1) ◽  
pp. 110-128
Author(s):  
Axel Buchner
Keyword(s):  
Private Equity ◽  
Liquidity Shocks ◽  
Content Type ◽  
Fund Managers ◽  
Asset Value ◽  
Equity Funds ◽  
Novel Theory ◽  
Private Equity Funds ◽  
Liquidity Premia ◽  
The Impact

Purpose – The purpose of this paper is to propose a novel theory of the equilibrium liquidity premia of private equity funds and explore its asset-pricing implications. Design/methodology/approach – The theory assumes that investors are exposed to the risk of facing surprise liquidity shocks, which upon arrival force them to liquidate their positions on the secondary private equity markets at some stochastic discount to the fund’s current net asset value. Assuming a competitive market where fund managers capture all rents from managing the funds and investors just break even on their positions, liquidity premia are defined as the risk-adjusted excess returns that fund managers must generate to compensate investors for the costs of illiquidity. The model is calibrated to data of buyout funds and is illustrated by using numerical simulations. Findings – The model analysis generates a rich set of novel implications. These concern how fund characteristics affect liquidity premia, the role of the investors’ propensities of liquidity shocks in determining liquidity premia and the impact of market conditions and cycles on liquidity premia. Originality/value – This is the first paper that derives liquidity premia of private equity funds in an equilibrium setting in which investors are exposed to the risk of facing surprise liquidity shocks.

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