Despite growing global geopolitical uncertainty, private equity continues to deliver strong returns aided in no small part by the prevailing climate of low interest rates. Asset prices have consistently risen as large pools of yield-hungry private equity-backed cash have sought out limited quality assets. The private equity model remains attractive to investors resulting in significant quantities of dry powder going into 2019. Increasing fund size facilitates ever larger M&A deals with private equity backing. With deals valued at over USD60 billion in the first half of 2018 alone and Cayman Islands companies being the target of 421 transactions, the Cayman Islands, by deal volume, ranks as the number one offshore jurisdiction for M&A transactions. The deal structure typically includes a statutory merger, a scheme of arrangement, and a tender offer. Ever-increasing interest in the sector by private equity is resulting in aggressive consolidation in the fiduciary space. For example, the disposal by TMF Group, a global provider of compliance and administration services, to CBC partners for total consideration of $1.75 billion and Apex Group Ltd. and Genstar Capital acquiring the Deutsche Bank Alternative Fund Services business. Fiduciary assets are attractive to private equity given the strong recurring cash flows derived from annuity-like revenues and the opportunity to apply rigorous management methods. These deals are almost exclusively cross-border often involving Cayman Islands structures highlighting the importance of careful structuring. TOPICS: Real assets/alternative investments/private equity, performance measurement, developed markets
{"title":"Private Equity Trends to Look Out for in 2019","authors":"S. Raftopoulos, Jacob MacAdam","doi":"10.3905/jpe.2019.1.077","DOIUrl":"https://doi.org/10.3905/jpe.2019.1.077","url":null,"abstract":"Despite growing global geopolitical uncertainty, private equity continues to deliver strong returns aided in no small part by the prevailing climate of low interest rates. Asset prices have consistently risen as large pools of yield-hungry private equity-backed cash have sought out limited quality assets. The private equity model remains attractive to investors resulting in significant quantities of dry powder going into 2019. Increasing fund size facilitates ever larger M&A deals with private equity backing. With deals valued at over USD60 billion in the first half of 2018 alone and Cayman Islands companies being the target of 421 transactions, the Cayman Islands, by deal volume, ranks as the number one offshore jurisdiction for M&A transactions. The deal structure typically includes a statutory merger, a scheme of arrangement, and a tender offer. Ever-increasing interest in the sector by private equity is resulting in aggressive consolidation in the fiduciary space. For example, the disposal by TMF Group, a global provider of compliance and administration services, to CBC partners for total consideration of $1.75 billion and Apex Group Ltd. and Genstar Capital acquiring the Deutsche Bank Alternative Fund Services business. Fiduciary assets are attractive to private equity given the strong recurring cash flows derived from annuity-like revenues and the opportunity to apply rigorous management methods. These deals are almost exclusively cross-border often involving Cayman Islands structures highlighting the importance of careful structuring. TOPICS: Real assets/alternative investments/private equity, performance measurement, developed markets","PeriodicalId":43579,"journal":{"name":"Journal of Private Equity","volume":null,"pages":null},"PeriodicalIF":0.0,"publicationDate":"2019-05-31","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"46359225","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":0,"RegionCategory":"","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
Josephine Gemson, M. Creighton, Sriram Radhakrishnan
The private equity industry has become a growing international phenomenon in recent years. As capital providers, PE firms are often seen to form collaborative relationships with one another during the investment process. These alliances can be pure syndicates—with similarly residing PE investors (domestic/foreign) or co-investments—when domestic and foreign PE investors jointly have stakes in the deal. In this study, the authors examine the composition of syndicates and their effect on investment patterns. They set their study in India, a country which is a rather late entrant into the PE market but has witnessed dramatic increases in PE investment in the last two decades. Using data from 1998 to 2014, pure syndicates are compared against those that have co-investment. The study also seeks to analyze if different syndicate types affect specific deal characteristics such as industry sector and investment size. Finally, the effects of investor origins and co-investment on investment size are explored. The results of the analysis indicate significant differences between industry sectors and deal characteristics, thus implying differing investor preferences. Regression analysis shows that co-investments were significantly associated with investment sizes. TOPICS: Private equity, performance measurement, emerging markets
{"title":"Do Investor Origins Affect Private Equity Investment Syndicates? A Case from India","authors":"Josephine Gemson, M. Creighton, Sriram Radhakrishnan","doi":"10.3905/jpe.2019.1.082","DOIUrl":"https://doi.org/10.3905/jpe.2019.1.082","url":null,"abstract":"The private equity industry has become a growing international phenomenon in recent years. As capital providers, PE firms are often seen to form collaborative relationships with one another during the investment process. These alliances can be pure syndicates—with similarly residing PE investors (domestic/foreign) or co-investments—when domestic and foreign PE investors jointly have stakes in the deal. In this study, the authors examine the composition of syndicates and their effect on investment patterns. They set their study in India, a country which is a rather late entrant into the PE market but has witnessed dramatic increases in PE investment in the last two decades. Using data from 1998 to 2014, pure syndicates are compared against those that have co-investment. The study also seeks to analyze if different syndicate types affect specific deal characteristics such as industry sector and investment size. Finally, the effects of investor origins and co-investment on investment size are explored. The results of the analysis indicate significant differences between industry sectors and deal characteristics, thus implying differing investor preferences. Regression analysis shows that co-investments were significantly associated with investment sizes. TOPICS: Private equity, performance measurement, emerging markets","PeriodicalId":43579,"journal":{"name":"Journal of Private Equity","volume":null,"pages":null},"PeriodicalIF":0.0,"publicationDate":"2019-05-31","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"45164233","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":0,"RegionCategory":"","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
Pub Date : 2019-05-31DOI: 10.3905/jpe.2019.22.3.064
R. Kashyap
We discuss a possible solution to an unintended consequence of having grades, certificates, rankings, and other diversions in the act of transferring knowledge, zooming in specifically on the topic of grading on a curve. We conduct a thought experiment, taking a chapter (and some more?) from the financial markets (where we trade pollution, etc.), to create a marketplace, where we can trade our grade, in a structure similar to the interest rate swap. We connect this to broader problems that creep up when we attach ourselves to artificial labels. The policy and philosophical implications of our arguments suggest that all trophies we collect (including certificates, grades, medals, etc.) should be viewed as personal or private equity (borrowing another widely used term in finance) and that we should not use them to determine the outcomes in any selection criteria except those with a cutoff point—not for jobs, higher studies, or financial scholarships, other than for entertainment or spectator sports. We suggest alternate methods for grading and performance assessment and suggest the use of tests similar to the Turing test for intelligence for evaluation of teaching and learning. TOPICS: Performance measurement, private equity
{"title":"For Whom the Bell (Curve) Tolls: A to F, Trade Your Grade Based on the Net Present Value of Friendships with Financial Incentives","authors":"R. Kashyap","doi":"10.3905/jpe.2019.22.3.064","DOIUrl":"https://doi.org/10.3905/jpe.2019.22.3.064","url":null,"abstract":"We discuss a possible solution to an unintended consequence of having grades, certificates, rankings, and other diversions in the act of transferring knowledge, zooming in specifically on the topic of grading on a curve. We conduct a thought experiment, taking a chapter (and some more?) from the financial markets (where we trade pollution, etc.), to create a marketplace, where we can trade our grade, in a structure similar to the interest rate swap. We connect this to broader problems that creep up when we attach ourselves to artificial labels. The policy and philosophical implications of our arguments suggest that all trophies we collect (including certificates, grades, medals, etc.) should be viewed as personal or private equity (borrowing another widely used term in finance) and that we should not use them to determine the outcomes in any selection criteria except those with a cutoff point—not for jobs, higher studies, or financial scholarships, other than for entertainment or spectator sports. We suggest alternate methods for grading and performance assessment and suggest the use of tests similar to the Turing test for intelligence for evaluation of teaching and learning. TOPICS: Performance measurement, private equity","PeriodicalId":43579,"journal":{"name":"Journal of Private Equity","volume":null,"pages":null},"PeriodicalIF":0.0,"publicationDate":"2019-05-31","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"48437375","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":0,"RegionCategory":"","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
In 2018, 2016 and 2014, Private Funds Management (PFM) published surveys sponsored by Pepper Hamilton LLP, PEF Services, and WithumSmith + Brown in which fund managers shared how they deal with fees and expenses. In addition, in 2015, Pepper Hamilton and MergerMarket partnered up to take a close look at the co-investment environment. These surveys offer unique insight into the granular approach that CFOs and CCOs must take to ensure the ordinary and extraordinary fees and expenses that occur in the life of a private equity fund are appropriately allocated to investors, co-investors, and/or managers. In fund design, ongoing investor relations and regulatory review and enforcement, the fees and expenses borne by investment funds and co-investment vehicles are receiving more intense focus each year. The Institutional Limited Partners Association (ILPA) has adopted a comprehensive reporting procedure for fees and expenses. Based on the PFM surveys and anecdotal information from audience polls at conferences, adoption of the ILPA form has been slow, but it is growing among middle market funds (sub-$1B) and has found a more favorable platform in larger funds. TOPICS: Private equity, performance measurement
2018年、2016年和2014年，私募基金管理公司（PFM）发布了由Pepper Hamilton LLP、PEF Services和WithumSmith+Brown赞助的调查，基金经理在调查中分享了他们如何处理费用和开支。此外，2015年，Pepper Hamilton和MergerMarket合作，密切关注共同投资环境。这些调查提供了对首席财务官和首席财务官必须采取的精细方法的独特见解，以确保私募股权基金生命中发生的普通和特殊费用和支出适当分配给投资者、共同投资者和/或经理。在基金设计、持续的投资者关系以及监管审查和执行方面，投资基金和共同投资工具所承担的费用和支出每年都受到越来越多的关注。机构有限合伙人协会（ILPA）对费用和支出采用了全面的报告程序。根据PFM调查和会议观众调查的轶事信息，ILPA形式的采用一直很慢，但在中等市场基金（低于10亿美元）中正在增长，并在大型基金中找到了更有利的平台。主题：私募股权，业绩衡量
{"title":"Fund Fees and Expenses—A Tale of Four Surveys: Trends 2014–2018","authors":"Julia D. Corelli","doi":"10.3905/jpe.2019.1.081","DOIUrl":"https://doi.org/10.3905/jpe.2019.1.081","url":null,"abstract":"In 2018, 2016 and 2014, Private Funds Management (PFM) published surveys sponsored by Pepper Hamilton LLP, PEF Services, and WithumSmith + Brown in which fund managers shared how they deal with fees and expenses. In addition, in 2015, Pepper Hamilton and MergerMarket partnered up to take a close look at the co-investment environment. These surveys offer unique insight into the granular approach that CFOs and CCOs must take to ensure the ordinary and extraordinary fees and expenses that occur in the life of a private equity fund are appropriately allocated to investors, co-investors, and/or managers. In fund design, ongoing investor relations and regulatory review and enforcement, the fees and expenses borne by investment funds and co-investment vehicles are receiving more intense focus each year. The Institutional Limited Partners Association (ILPA) has adopted a comprehensive reporting procedure for fees and expenses. Based on the PFM surveys and anecdotal information from audience polls at conferences, adoption of the ILPA form has been slow, but it is growing among middle market funds (sub-$1B) and has found a more favorable platform in larger funds. TOPICS: Private equity, performance measurement","PeriodicalId":43579,"journal":{"name":"Journal of Private Equity","volume":null,"pages":null},"PeriodicalIF":0.0,"publicationDate":"2019-05-31","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"43641692","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":0,"RegionCategory":"","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
Pub Date : 2019-05-31DOI: 10.3905/jpe.2019.22.3.093
Jinghan Cai, Ahmed Gomaa
An initial coin offering (ICO) is the procedure whereby ventures raise capital by selling tokens to investors. Compared with traditional financing methods, ICOs are new and less understood by both the industry and academia. For example, the literature is not clear about which factors determine the success rate or the amount raised in an ICO. Existing literature (Fisch 2019) shows that the signals of the private information of an ICO’s high quality determine the amount of funding in the ICO. This article is the first in the literature that provides evidence that investor sentiment and investor awareness are determinants of the amounts raised in an ICO. Moreover, it provides evidence confirming the signaling hypothesis. Specifically, ICOs with a pre-ICO and with a higher rating are more likely to raise more funds. This article is the only one in the literature that uses the entire market of 4,367 ICOs to confirm its findings. The results extend the understanding of the dynamics of an ICO to the behavioral field and enable investors and practitioners to understand the crucial determinants of both ICO success rates and the amounts raised. TOPICS: Real assets/alternative investments/private equity
{"title":"Initial Coin Offering to Finance Venture Capital: A Behavioral Perspective","authors":"Jinghan Cai, Ahmed Gomaa","doi":"10.3905/jpe.2019.22.3.093","DOIUrl":"https://doi.org/10.3905/jpe.2019.22.3.093","url":null,"abstract":"An initial coin offering (ICO) is the procedure whereby ventures raise capital by selling tokens to investors. Compared with traditional financing methods, ICOs are new and less understood by both the industry and academia. For example, the literature is not clear about which factors determine the success rate or the amount raised in an ICO. Existing literature (Fisch 2019) shows that the signals of the private information of an ICO’s high quality determine the amount of funding in the ICO. This article is the first in the literature that provides evidence that investor sentiment and investor awareness are determinants of the amounts raised in an ICO. Moreover, it provides evidence confirming the signaling hypothesis. Specifically, ICOs with a pre-ICO and with a higher rating are more likely to raise more funds. This article is the only one in the literature that uses the entire market of 4,367 ICOs to confirm its findings. The results extend the understanding of the dynamics of an ICO to the behavioral field and enable investors and practitioners to understand the crucial determinants of both ICO success rates and the amounts raised. TOPICS: Real assets/alternative investments/private equity","PeriodicalId":43579,"journal":{"name":"Journal of Private Equity","volume":null,"pages":null},"PeriodicalIF":0.0,"publicationDate":"2019-05-31","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"43748410","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":0,"RegionCategory":"","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
Our confidence in the future will help determine the future—for better or worse. VCs, financiers of innovation and new venture creation, have a longer-term time horizon than most other investment executives, so their confidence about the future will tend to have impacts on the economy that affect all of us. Silicon Valley VCs, who are making investment decisions in the global heart of innovation in particular have been shown to exert a strong influence on the evolution of business, so their outlook may be a significant factor in determining the future. To develop a quantitative index and qualitative commentary of trends and insights, Silicon Valley Venture Capitalist Confidence Index™ Research Reports have tracked VC confidence about the future entrepreneurial environment among about 30 VCs since Q1 2004. This article reviews Silicon Valley VC confidence over the six quarters from Q3 2017 to Q4 2018 in the context of concurrent economic indicators and finds that increasing VC sentiment tends to be based on improvements in exit opportunities and new technology disruptions that create new markets, while decreasing VC sentiment is linked to high valuations, rising costs of business, rising competition for talent, and uncertainty in the macro environment. VC confidence also appears to correspond to CEO confidence, perhaps due to the operational focus of VCs. Because VC confidence in the future entrepreneurial environment tends to impact their business decisions today (e.g., investments in new ventures), tracking VC confidence and the factors that drive it may provide unique and valuable insights to private and public market participants. TOPICS: Real assets/alternative investments/private equity
{"title":"Confidence among Silicon Valley Venture Capitalists Q3 2017–Q4 2018: Trends, Insights, and Tells","authors":"M. Cannice","doi":"10.3905/jpe.2019.1.080","DOIUrl":"https://doi.org/10.3905/jpe.2019.1.080","url":null,"abstract":"Our confidence in the future will help determine the future—for better or worse. VCs, financiers of innovation and new venture creation, have a longer-term time horizon than most other investment executives, so their confidence about the future will tend to have impacts on the economy that affect all of us. Silicon Valley VCs, who are making investment decisions in the global heart of innovation in particular have been shown to exert a strong influence on the evolution of business, so their outlook may be a significant factor in determining the future. To develop a quantitative index and qualitative commentary of trends and insights, Silicon Valley Venture Capitalist Confidence Index™ Research Reports have tracked VC confidence about the future entrepreneurial environment among about 30 VCs since Q1 2004. This article reviews Silicon Valley VC confidence over the six quarters from Q3 2017 to Q4 2018 in the context of concurrent economic indicators and finds that increasing VC sentiment tends to be based on improvements in exit opportunities and new technology disruptions that create new markets, while decreasing VC sentiment is linked to high valuations, rising costs of business, rising competition for talent, and uncertainty in the macro environment. VC confidence also appears to correspond to CEO confidence, perhaps due to the operational focus of VCs. Because VC confidence in the future entrepreneurial environment tends to impact their business decisions today (e.g., investments in new ventures), tracking VC confidence and the factors that drive it may provide unique and valuable insights to private and public market participants. TOPICS: Real assets/alternative investments/private equity","PeriodicalId":43579,"journal":{"name":"Journal of Private Equity","volume":null,"pages":null},"PeriodicalIF":0.0,"publicationDate":"2019-05-31","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"42514311","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":0,"RegionCategory":"","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
The authors present a stochastic simulation model that projects cash flows (capital calls and distributions) as well as unfunded commitment levels for private equity allocations over time. Their contribution links the underlying dynamics in the targeted private equity allocation to movements in the underlying portfolio while managing liquidity and rebalancing risks. Importantly, their model allows investors to assess the impact of changing the pace of annual commitment and of varying assumptions regarding capital calls, distributions, and underlying returns. Their model also offers insights into more-efficient approaches to building up an allocation to private equity strategies over time. TOPICS: Private equity, simulations, portfolio construction
{"title":"Long-Run Management of Private Equity Investment","authors":"Pengguo Wang, Steven J. Peterson","doi":"10.3905/jpe.2019.1.083","DOIUrl":"https://doi.org/10.3905/jpe.2019.1.083","url":null,"abstract":"The authors present a stochastic simulation model that projects cash flows (capital calls and distributions) as well as unfunded commitment levels for private equity allocations over time. Their contribution links the underlying dynamics in the targeted private equity allocation to movements in the underlying portfolio while managing liquidity and rebalancing risks. Importantly, their model allows investors to assess the impact of changing the pace of annual commitment and of varying assumptions regarding capital calls, distributions, and underlying returns. Their model also offers insights into more-efficient approaches to building up an allocation to private equity strategies over time. TOPICS: Private equity, simulations, portfolio construction","PeriodicalId":43579,"journal":{"name":"Journal of Private Equity","volume":null,"pages":null},"PeriodicalIF":0.0,"publicationDate":"2019-05-31","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"46228346","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":0,"RegionCategory":"","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
Pub Date : 2019-05-31DOI: 10.3905/jpe.2019.22.3.056
K. Zeeshan, S. Azhar, S. Sreenivasa Murthy
This study analyzes the solvency and profitability of select private equity funds in India: Sequoia Capital India, ChrysCapital, Everstone Capital Advisors Pvt, ICICI Ventures, and West Bridge Capital. Solvency is determined by the debt-to-equity ratio, interest coverage ratio, and proprietary ratio, and profitability is determined using ratios such as return on total assets, return on investment, and earnings per share. It can be concluded that there are significant differences in terms of the current ratio, debt-to-equity ratio, proprietary ratio, and return on total assets ratio of select private equity funds in India, meaning that at least one of the means of a sample is different. The test results also indicate that there is no significant difference in terms of return on shareholders’ funds, return on investment, and earnings per share. Hence, this ratio analysis is a useful management tool to improve the understanding of financial results and trends over time and can provide key indicators of organizational performance. TOPICS: Emerging markets, private equity, performance measurement
本研究分析了印度精选私募股权基金的偿付能力和盈利能力：红杉资本印度公司、克莱斯勒资本公司、Everstone Capital Advisors Pvt、ICICI Ventures和West Bridge Capital。偿付能力由债务权益比率、利息覆盖率和所有权比率决定，盈利能力由总资产回报率、投资回报率和每股收益等比率决定。可以得出的结论是，印度精选私募股权基金的流动比率、负债权益比率、所有权比率和总资产回报率存在显著差异，这意味着至少有一个样本的方法不同。测试结果还表明，在股东资金回报率、投资回报率和每股收益方面没有显著差异。因此，这种比率分析是一种有用的管理工具，可以提高对财务结果和长期趋势的理解，并可以提供组织绩效的关键指标。主题：新兴市场、私募股权、业绩衡量
{"title":"Profitability Analysis of Select Private Equity Funds in India","authors":"K. Zeeshan, S. Azhar, S. Sreenivasa Murthy","doi":"10.3905/jpe.2019.22.3.056","DOIUrl":"https://doi.org/10.3905/jpe.2019.22.3.056","url":null,"abstract":"This study analyzes the solvency and profitability of select private equity funds in India: Sequoia Capital India, ChrysCapital, Everstone Capital Advisors Pvt, ICICI Ventures, and West Bridge Capital. Solvency is determined by the debt-to-equity ratio, interest coverage ratio, and proprietary ratio, and profitability is determined using ratios such as return on total assets, return on investment, and earnings per share. It can be concluded that there are significant differences in terms of the current ratio, debt-to-equity ratio, proprietary ratio, and return on total assets ratio of select private equity funds in India, meaning that at least one of the means of a sample is different. The test results also indicate that there is no significant difference in terms of return on shareholders’ funds, return on investment, and earnings per share. Hence, this ratio analysis is a useful management tool to improve the understanding of financial results and trends over time and can provide key indicators of organizational performance. TOPICS: Emerging markets, private equity, performance measurement","PeriodicalId":43579,"journal":{"name":"Journal of Private Equity","volume":null,"pages":null},"PeriodicalIF":0.0,"publicationDate":"2019-05-31","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"42490158","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":0,"RegionCategory":"","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
Gorbenko and Malenko (2014) propose a segmented-market perspective. In this article, the authors extend the literature by directly testing if a segmented-market perspective helps explain the premium difference between private and public acquisitions. Empirically, they follow Fidrmuc et al. (2012) and use a matched sample design. They find that private acquirers do not pay less than public acquirers when controlling for the selling mechanism (which characterizes different corporate control markets) as well as the effects of outliers. Their results suggest that premium differences between private and public acquisitions may be more consistent with a segmented-market perspective as opposed to the agency explanation of Bargeron et al. (2008). TOPICS: Private equity, performance measurement
{"title":"Is the Corporate Control Market Segmented?","authors":"Ding Du, Mason S. Gerety","doi":"10.3905/jpe.2019.1.078","DOIUrl":"https://doi.org/10.3905/jpe.2019.1.078","url":null,"abstract":"Gorbenko and Malenko (2014) propose a segmented-market perspective. In this article, the authors extend the literature by directly testing if a segmented-market perspective helps explain the premium difference between private and public acquisitions. Empirically, they follow Fidrmuc et al. (2012) and use a matched sample design. They find that private acquirers do not pay less than public acquirers when controlling for the selling mechanism (which characterizes different corporate control markets) as well as the effects of outliers. Their results suggest that premium differences between private and public acquisitions may be more consistent with a segmented-market perspective as opposed to the agency explanation of Bargeron et al. (2008). TOPICS: Private equity, performance measurement","PeriodicalId":43579,"journal":{"name":"Journal of Private Equity","volume":null,"pages":null},"PeriodicalIF":0.0,"publicationDate":"2019-04-13","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"45790162","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":0,"RegionCategory":"","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
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