Corporate Governance and Value Creation: Evidence from Private Equity

Viral Acharya, Oliver F. Gottschalg, Moritz Hahn and Conor Kehoe

The Review of Financial Studies, 2013, vol. 26, issue 2, 368-402

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. The Author 2012. Published by Oxford University Press on behalf of The Society for Financial Studies. All rights reserved. For Permissions, please e-mail: journals.permissions@oup.com., Oxford University Press.

Date: 2013
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Working Paper: 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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