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Private equity portfolio company performance during the global recession

Author

Listed:
  • Wilson, Nick
  • Wright, Mike
  • Siegel, Donald S.
  • Scholes, Louise

Abstract

We assess the recent economic and financial performance of U.K. private equity (PE) backed buyouts. Our empirical evidence, which is based on thousands of transactions, reveals that PE-backed buyouts achieved superior economic and financial performance in the period before and during the recent global recession, relative to comparable firms that did not experience such transactions. Our regression results imply positive differentials of 5–15% in productivity and approximately 3–5% in profitability for buyout firms, relative to non-buyout firms. Another key finding is that revenue and employment growth for PE- backed firms were positive during the sample period.

Suggested Citation

  • Wilson, Nick & Wright, Mike & Siegel, Donald S. & Scholes, Louise, 2012. "Private equity portfolio company performance during the global recession," Journal of Corporate Finance, Elsevier, vol. 18(1), pages 193-205.
    • Handle: RePEc:eee:corfin:v:18:y:2012:i:1:p:193-205
    DOI: 10.1016/j.jcorpfin.2011.11.008
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    More about this item

    Keywords

    Management buyouts; Private equity; Total factor productivity; Employment; Financial performance; Global recession;
    All these keywords.

    JEL classification:

    • G34 - Financial Economics - - Corporate Finance and Governance - - - Mergers; Acquisitions; Restructuring; Corporate Governance
    • G32 - Financial Economics - - Corporate Finance and Governance - - - Financing Policy; Financial Risk and Risk Management; Capital and Ownership Structure; Value of Firms; Goodwill

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