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Winning a Deal in Private Equity: Do Educational Networks Matter?

Florian Fuchs (), Roland Fuess (), Tim Jenkinson and Stefan Morkoetter
Authors registered in the RePEc Author Service: Roland Füss ()

No 17155, Working Papers on Finance from University of St. Gallen, School of Finance

Abstract: Networks can establish business connections and facilitate information flows. But how valuable are they in competitive settings, such as the deal generation of private equity? We find that educational ties between acquiring partner and target firm management are frequent (around 15%) and increase the odds of winning a deal (by 79%). When competing with other funds, exclusivity rather than the school’s ranking matters. In addition, educational ties also allow mitigating prevailing home bias. Yet, the pure existence of network-based relationships does not automatically lead to better deal performance.

Keywords: Investment Choice; Deal Sourcing; Networks; Social Ties; Buyout (search for similar items in EconPapers)
JEL-codes: G11 G15 G24 G34 (search for similar items in EconPapers)
Pages: 43 pages
Date: 2017-10
New Economics Papers: this item is included in nep-cfn
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