Empirical Part II — The GP Firm and Manager Effect


In the first chapter of empirical results, it was established that leveraged buyouts as part of the Private Equity investment asset class do create superior value when compared to public markets. This finding was achieved based on (i) the control population dataset from Thomson Venture Economics, which included fund return data, as well as (ii) the Limited Partners’ primary dataset of individual buyout transactions. The analysis further highlighted under which exogenous, i.e. market and acquisition related, conditions buyout transactions were more likely to be successful. Moreover, an analysis of the key financial accounting patterns both on the target company level and with respect to its underlying industry financial dynamics at the time of deal entry and exit revealed, where the value creation in buyout transactions stems from. From both the Thomson Venture Economics fund return analysis as well as the deal level findings, it became evident that the variance of success between individual deals, funds and the various General Partners was considerable. As a consequence, this second empirical chapter seeks to shed light on the non-financial, human factor “Buyout firm and its Investment Professionals”, as this factor is expected to be a key driver in the value creation process and may eventually determine success and failure of a buyout transaction.


Private Equity Team Size Portfolio Company Investment Manager General Partner 
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© Deutscher Universitäts-Verlag | GWV Fachverlage GmbH, Wiesbaden 2006

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