Corporate Governance and Value Creation: Evidence from Private Equity

Oliver Gottschalg (), Viral Acharya, Moritz Hahn and Conor Kehoe
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Oliver Gottschalg: GREGH - Groupement de Recherche et d'Etudes en Gestion à HEC - HEC Paris - Ecole des Hautes Etudes Commerciales - CNRS - Centre National de la Recherche Scientifique
Moritz Hahn: Department of Economics - LMU - Ludwig Maximilian University [Munich] = Ludwig Maximilians Universität München

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Abstract: Using deal-level data from transactions initiated by large private equity houses, we find that the abnormal performance of deals is positive on average, after controlling for leverage and sector returns. Higher abnormal performance is related to improvement in sales and operating margin during the private phase, relative to that for quoted peers. General partners who are ex-consultants or ex-industry managers are associated with outperforming deals focused on internal value-creation programs, and ex-bankers or ex-accountants with outperforming deals involving significant mergers and acquisitions. The findings suggest the presence, on average, of positive but heterogeneous skills at the deal-partner level in large private equity transactions.

Keywords: Corporate Governance; Value Creation; Private Equity (search for similar items in EconPapers)
Date: 2013-02
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Published in Review of Financial Studies, 2013, 26 (2), pp.368-402. ⟨10.1093/rfs/hhs117⟩

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Related works:
Journal Article: Corporate Governance and Value Creation: Evidence from Private Equity (2013)
Working Paper: Corporate Governance and Value Creation: Evidence from Private Equity (2009)
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Persistent link: https://EconPapers.repec.org/RePEc:hal:journl:hal-00784067

DOI: 10.1093/rfs/hhs117

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