Heterogenity in Private
 Equity Investment Styles
and Outcomes: A Neglected
          Isssue?
                     Sigurt ...
Overview of Presentation
• „Angels vs. Demons“ debate too simplistic
• Impact of PE on companies varies greatly:
  -- acro...
Research: Leading or Lagging
         Public Debate?
• „Angels or Demons?“ (Lutz/Achleitner 2009)
• „Are PE Investors Good...
PE Model
• Different strategies: Growth vs.
  Operational Efficiencies vs. Turnaround
• Potential changes: management, HRM...
Different PE Styles/Experience?




Source: Moody‘s „$640 billion and 640 days later“
PE Transaction/Equity Value
    by Deal Size, 2007-2009
                                                                  ...
Were Mega-Deals a Market Failure?




Source: Moody‘s „$640 billion and 640 days later“
Different trade unionist
             experiences with PE




Source: Unionen „Owned by Private Equity“, 2008 survey of Sw...
A Looming Refinancing Crisis?




Source: Moody‘s „$640 billion and 640 days later“
Distressed Exchange vs.
               Bankruptcy




Source: Moody‘s Private Equity 2009
A Research and Policy Agenda
• Lack of transparency: a problem for research
• Drivers of different PE strategies/impacts?
...
THANK YOU FOR YOUR

ATTENTION!!!!!!!!!!!!!!!!!!!!
Upcoming SlideShare
Loading in …5
×

Workshop Private Equity - Vitols

442 views

Published on

0 Comments
0 Likes
Statistics
Notes
  • Be the first to comment

  • Be the first to like this

No Downloads
Views
Total views
442
On SlideShare
0
From Embeds
0
Number of Embeds
1
Actions
Shares
0
Downloads
5
Comments
0
Likes
0
Embeds 0
No embeds

No notes for slide

Workshop Private Equity - Vitols

  1. 1. Heterogenity in Private Equity Investment Styles and Outcomes: A Neglected Isssue? Sigurt Vitols Wissenschaftszentrum Berlin für Sozialforschung Presentation for the Restructuring Forum: The Impact of Financial Investors on Enterprises, Brussels 5/6 July 2010
  2. 2. Overview of Presentation • „Angels vs. Demons“ debate too simplistic • Impact of PE on companies varies greatly: -- across company types -- across PE firms • Looming refinancing crisis? • Redirection of research and policy agenda necessary?
  3. 3. Research: Leading or Lagging Public Debate? • „Angels or Demons?“ (Lutz/Achleitner 2009) • „Are PE Investors Good or Evil?“ (DIW 2009) • Most econometric studies of PE impact: -- measure „average“ effect of PE -- assume all PE firms the same
  4. 4. PE Model • Different strategies: Growth vs. Operational Efficiencies vs. Turnaround • Potential changes: management, HRM, acquisitions, investment, R&D policy • Source of profits: increase in company value, tax benefits, market timing • Financing: different mixes of debt + equity • Debt: discipline device or danger to firm?
  5. 5. Different PE Styles/Experience? Source: Moody‘s „$640 billion and 640 days later“
  6. 6. PE Transaction/Equity Value by Deal Size, 2007-2009 5.7 6 5 4 3.1 2.6 3 2.1 2 1 0 Small Mid-market Large Mega Source: Own calculations from EVCA Buyouts Report 2009
  7. 7. Were Mega-Deals a Market Failure? Source: Moody‘s „$640 billion and 640 days later“
  8. 8. Different trade unionist experiences with PE Source: Unionen „Owned by Private Equity“, 2008 survey of Swedish TU reps
  9. 9. A Looming Refinancing Crisis? Source: Moody‘s „$640 billion and 640 days later“
  10. 10. Distressed Exchange vs. Bankruptcy Source: Moody‘s Private Equity 2009
  11. 11. A Research and Policy Agenda • Lack of transparency: a problem for research • Drivers of different PE strategies/impacts? • Best framework for encouraging „good“ and discouraging „bad“ PE outcomes? – Leverage cap in context of market failure – Employee information/consultation rights • Impact of distressed exchange vs. bankruptcy? • Policy measures for the looming refinancing crisis?
  12. 12. THANK YOU FOR YOUR ATTENTION!!!!!!!!!!!!!!!!!!!!

×