What Do Private Equity Firms Say They Do?

Paul Gompers, Steven Kaplan () and Vladimir Mukharlyamov ()
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Vladimir Mukharlyamov: Harvard University

No 15-081, Harvard Business School Working Papers from Harvard Business School

Abstract: We survey 79 private equity investors with combined AUM of over $750B about their practices in firm valuation, capital structure, governance, and value creation. Investors rely primarily on IRR and multiples to evaluate investments. Their LPs focus more on absolute performance. Capital structure choice is based equally on optimal trade-off and market timing considerations. PE investors anticipate adding value to portfolio companies, with a greater focus on increasing growth than on reducing costs. We also explore how the actions that PE managers say they take group into specific firm strategies and how those strategies are related to firm founder characteristics.

Pages: 66 pages
Date: 2015-04
New Economics Papers: this item is included in nep-bec and nep-sbm
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Citations: View citations in EconPapers (5)

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Related works:
Journal Article: What do private equity firms say they do? (2016)
Working Paper: What Do Private Equity Firms Say They Do? (2015)
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Persistent link: https://EconPapers.repec.org/RePEc:hbs:wpaper:15-081

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