Competitive Strategy of Private Equity

Abstract

Is KKR a PE firm or an investment bank? This study analyzes a puzzling phenomenon in the PE sector and initiates strategy research on the corporate level of the PE firm. An empirical investigation of two thirds of the PE universe discovers strategic groups with diametric strategic patterns, ranging from a traditional monolithic PE model to a multi-business PE centered model. The evidence suggests that one strategic group is actually traversing the confines of the strategic space of traditional PE. Recognizing that this group is leading the industry in terms of PE assets under management, capital supply, deal flow, and investment size, this study suggests that the phenomenon should receive more research attention.