Rivals or partners? Evidence from Europe's international private equity deals

Andrea Schertler () and Tereza Tykvová

No 06-091, ZEW Discussion Papers from ZEW - Leibniz Centre for European Economic Research

Abstract: Cross-border private equity deals have increased substantially in recent years. This study looks at the issue of how European investors view their local counterparts in the portfolio companies? home countries. If they regard them as rivals, they will target countries that lack a private equity industry. If they view them as (potential) partners, however, they will prefer investing in countries with a mature private equity industry. We test these two contradictory hypotheses by using a unique cross-border country dataset on international investments of European private equity investors. We find that European investors predominantly invest in countries with more mature private equity industries. The presence of local private equity investors also determines how European investors exploit differences in growth rates between the target country and their home country : European private equity investors respond more strongly to given growth differentials if investments can be syndicated with an experienced local investor. In our reading, these findings are in line with the partnership hypothesis.

Keywords: Private Equity; Internationalization; Transnational Syndication (search for similar items in EconPapers)
JEL-codes: F21 G24 (search for similar items in EconPapers)
Date: 2006
New Economics Papers: this item is included in nep-eec
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (1)

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Persistent link: https://EconPapers.repec.org/RePEc:zbw:zewdip:5484

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