Performance of Private Equity-Backed IPOs. Evidence from the UK After the Financial Crisis

Performance of Private Equity-Backed IPOs. Evidence from the UK After the Financial Crisis PDF

Author: Dustin Martin Brandt

Publisher: Igel

Published: 2019-12-16

Total Pages: 130

ISBN-13: 9783954853694

DOWNLOAD EBOOK →

This study aims to analyse whether PE-backed IPOs in the UK in a post-financial crisis period retain to show first day underpricing, as it is true for average IPOs. However, more importantly is to find whether consisent with Johannson (2011), who found that European PE-backed IPOs have less underpricing, 4.67% compared to 16.40% in case of average IPOs, in paricular PE-backed IPOs in the UK show less underpricing than their non-backed counterparts. In the past, that is found true for PE-backed IPOs on the LSE between 1992 and 2005, and PE-backed IPOs on the LSE and the Alternative Investment Market (AIM) between 2011 and 2011. Hence, the first research question is: Do PE-backed IPOs in the UK show less underpricing on the initial day than non-sponsor backed IPOs in a post-financial crisis period? And secondly, do PE-backed IPOs in the UK in the long-run outperform non-sponsor backed IPOs in post-financial crisis period? One rationale is to examine whether equity markets experienced structural changes which might potentially affect the performance of PE-backed IPOs, which were deemed as such with superior returns. From a practical perspective, this study aims to make a contribution to investors who consider investing in equities in that sense, that it allows to better understand the aftermarket performance of PE-backed IPOs in the UK in a period after a major global financial crisis.

Value creation by private equity-backed IPOs. Underpricing and long-term performance in Germany

Value creation by private equity-backed IPOs. Underpricing and long-term performance in Germany PDF

Author: Matthias Hetzenecker

Publisher: GRIN Verlag

Published: 2020-11-19

Total Pages: 76

ISBN-13: 3346299635

DOWNLOAD EBOOK →

Bachelor Thesis from the year 2019 in the subject Business economics - Review of Business Studies, grade: 1,0, University of applied Sciences Regensburg, language: English, abstract: This paper examines value creation by private equity-backed IPOs. It gives detailed insights on a mostly US-based research topic analyzing 134 German IPOs from 2002 to 2018, of which 49 were identified as PE-backed, and contributes empirical evidence on the discussion of private equity value creation. The empirical results provide detailed information on whether private equity financing can be a suitable financing source for companies by comparing and analyzing the performance differences between IPOs of companies with and without private equity sponsors. Furthermore, the paper provides empirical evidence on the IPO phenomena of underpricing and negative long-term performance for Germany, differentiating itself from former studies in terms of a broader time horizon and an extensive return calculation methodology. Since the locust swarms debate initiated by SPD politician Franz Müntefering, private equity investors have had to struggle with an extremely bad reputation in Germany. Unpopular measures such as company divestures or mass redundancies to achieve set turnover and return targets reinforce the negative image of financial investors. Accordingly, investor and business magnate Warren Buffet criticized that businesses under private equity control become a piece of merchandise. Nonetheless, the private equity industry continues to boom, reaching new records in terms of global business volume and transactions. Under these circumstances and new evolving discussions, it is essential to take a close look at the business model of private equity firms and to analyze potential short- and long-term value creation in their portfolio companies.

The Long-run Performance of Private Equity-backed IPOs in the US and the UK

The Long-run Performance of Private Equity-backed IPOs in the US and the UK PDF

Author: Luca Fritz

Publisher:

Published: 2016

Total Pages:

ISBN-13:

DOWNLOAD EBOOK →

This thesis studies the long-run performance of Private Equity-backed and non Private Equity-backed Initial Public Offerings between the years 2000 and 2012 in the United States and the United Kingdom. Using a unique data sample of 141 PE-backed and 185 non PE-backed IPOs between 1-10 billion in market capitalisation, this study measures the statistical significance of their abnormal performance three years after the IPO using all of the conventional performance measurement methodologies. Due to the measurements' considerable shortfalls, a new abnormal return measurement was developed, which allows for a new perspective on long-term performance by taking into account the companies' financial and industry risk, as well as investors' return expectations. Contrary to prior research, it was found that PE-backed IPOs do not outperform the market, while non-backed IPO firms do, especially in the US. Furthermore, companies that went public in years of heavy IPO activity did not underperform worse. It could also not be shown that IPO firms in technological industry sectors exhibit worse long-run returns compared to others. Lastly, a considerable impact of firm size on post-issue operating performance could be established, despite the size restricted sample. Measurement issues in long-run IPO performance studies were, however, clearly brought to light.

The Performance Private Equity Backed Ipos

The Performance Private Equity Backed Ipos PDF

Author: Mario Levis

Publisher:

Published: 2010

Total Pages: 37

ISBN-13:

DOWNLOAD EBOOK →

The paper examines the aftermarket performance of private equity-backed initial public offerings (IPOs) based a hand collected sample of private equity-backed and equivalent samples of venture capital-backed and other non-sponsored issues on the London Stock Exchange. The evidence suggests marked differences across the three groups in terms of market size, industry classification and key operating characteristics at the time of flotation. Private equity-backed IPOs exhibit superior performance compared with their counterparts throughout the 36 months period in the aftermarket; such performance is robust across different benchmarks and estimation procedures. The performance of private equity-backed IPOs is positively related to their level of leverage and the proportion of equity maintained by the private equity sponsors immediately after flotation.

Handbook of Research on IPOs

Handbook of Research on IPOs PDF

Author: Mario Levis

Publisher: Edward Elgar Publishing

Published: 2013-11-29

Total Pages: 599

ISBN-13: 1781955379

DOWNLOAD EBOOK →

The chapters offer some important new insights into issues that will be of interest not only to the academic community but also to professionals involved in the preparation, structure and execution of such transactions, market regulators, and private a

The Financial Crisis Inquiry Report

The Financial Crisis Inquiry Report PDF

Author: Financial Crisis Inquiry Commission

Publisher: Cosimo, Inc.

Published: 2011-05-01

Total Pages: 692

ISBN-13: 1616405414

DOWNLOAD EBOOK →

The Financial Crisis Inquiry Report, published by the U.S. Government and the Financial Crisis Inquiry Commission in early 2011, is the official government report on the United States financial collapse and the review of major financial institutions that bankrupted and failed, or would have without help from the government. The commission and the report were implemented after Congress passed an act in 2009 to review and prevent fraudulent activity. The report details, among other things, the periods before, during, and after the crisis, what led up to it, and analyses of subprime mortgage lending, credit expansion and banking policies, the collapse of companies like Fannie Mae and Freddie Mac, and the federal bailouts of Lehman and AIG. It also discusses the aftermath of the fallout and our current state. This report should be of interest to anyone concerned about the financial situation in the U.S. and around the world.THE FINANCIAL CRISIS INQUIRY COMMISSION is an independent, bi-partisan, government-appointed panel of 10 people that was created to "examine the causes, domestic and global, of the current financial and economic crisis in the United States." It was established as part of the Fraud Enforcement and Recovery Act of 2009. The commission consisted of private citizens with expertise in economics and finance, banking, housing, market regulation, and consumer protection. They examined and reported on "the collapse of major financial institutions that failed or would have failed if not for exceptional assistance from the government."News Dissector DANNY SCHECHTER is a journalist, blogger and filmmaker. He has been reporting on economic crises since the 1980's when he was with ABC News. His film In Debt We Trust warned of the economic meltdown in 2006. He has since written three books on the subject including Plunder: Investigating Our Economic Calamity (Cosimo Books, 2008), and The Crime Of Our Time: Why Wall Street Is Not Too Big to Jail (Disinfo Books, 2011), a companion to his latest film Plunder The Crime Of Our Time. He can be reached online at www.newsdissector.com.

Trade Credit and Bank Credit

Trade Credit and Bank Credit PDF

Author: Inessa Love

Publisher: World Bank Publications

Published: 2005

Total Pages: 34

ISBN-13:

DOWNLOAD EBOOK →

"The authors study the effect of financial crises on trade credit in a sample of 890 firms in six emerging economies. They find that although provision of trade credit increases right after the crisis, it consequently collapses in the following months and years. The authors observe that firms with weaker financial position (for example, high pre-crisis level of short-term debt and low cash stocks and cash flows) are more likely to reduce trade credit provided to their customers. This suggests that the decline in aggregate credit provision is driven by the reduction in the supply of trade credit, which follows the bank credit crunch. The results are consistent with the "redistribution view" of trade credit provision, in which bank credit is redistributed by way of trade credit by the firms with stronger financial position to the firms with weaker financial stand "--World Bank web site.

Venture Capital and Private Equity Contracting

Venture Capital and Private Equity Contracting PDF

Author: Douglas J. Cumming

Publisher: Academic Press

Published: 2013-08-21

Total Pages: 781

ISBN-13: 0124095968

DOWNLOAD EBOOK →

Other books present corporate finance approaches to the venture capital and private equity industry, but many key decisions require an understanding of the ways that law and economics work together. This revised and updated 2e offers broad perspectives and principles not found in other course books, enabling readers to deduce the economic implications of specific contract terms. This approach avoids the common pitfalls of implying that contractual terms apply equally to firms in any industry anywhere in the world. In the 2e, datasets from over 40 countries are used to analyze and consider limited partnership contracts, compensation agreements, and differences in the structure of limited partnership venture capital funds, corporate venture capital funds, and government venture capital funds. There is also an in-depth study of contracts between different types of venture capital funds and entrepreneurial firms, including security design, and detailed cash flow, control and veto rights. The implications of such contracts for value-added effort and for performance are examined with reference to data from an international perspective. With seven new or completely revised chapters covering a range of topics from Fund Size and Diseconomies of Scale to Fundraising and Regulation, this new edition will be essential for financial and legal students and researchers considering international venture capital and private equity. An analysis of the structure and governance features of venture capital contracts In-depth study of contracts between different types of venture capital funds and entrepreneurial firms Presents international datasets from over 40 countries around the world Additional references on a companion website Contains sample contracts, including limited partnership agreements, term sheets, shareholder agreements, and subscription agreements

Private Equity Compliance

Private Equity Compliance PDF

Author: Jason A. Scharfman

Publisher: John Wiley & Sons

Published: 2018-09-07

Total Pages: 224

ISBN-13: 1119479630

DOWNLOAD EBOOK →

Develop and manage a private equity compliance program Compliance has become one of the fastest-growing areas in the private equity (PE) space. Mirroring trends from the hedge fund industry, recent surveys indicate that PE managers rank compliance as the single most challenging aspect of their business. Reports also indicate that PE compliance spending has rapidly outpaced other PE operating costs with recent estimates indicating that individual PE funds on average spend at least 15 - 20% of their operating budgets on this area. General Partners (GPs) have also significantly ramped up the hiring of private equity compliance related roles. Private Equity Compliance provides current and practical guidance on key private equity (PE) compliance challenges and trends. Packed with detailed, practical guidance on developing and managing a private equity compliance program, it offers up-to-date case studies and an analysis of critical regulatory enforcement actions on private equity funds in areas including conflict of interest, fees, expenses, LP fun raising disclosures, and valuations. • Provides real-world compliance guidance • Offers information that is tailored to the current compliance practices employed by GPs in the private equity industry. • Provides guidance on managing the compliance risks associated with cybersecurity and information technology risk • Serves as a PE-focused complement to the author's previous book, Hedge Fund Compliance If you’re a private equity investor or compliance officer looking for trusted guidance on analyzing conflicts, fees, and risks, this is one reference you can’t be without.

Lanterna Rally - Theme by Grace Themes