2012 | OriginalPaper | Buchkapitel
Do Parenting Strategies Pay Off for PE Firms?
verfasst von : Matthias Krühler
Erschienen in: Managing Business Portfolios Effectively
Verlag: Gabler Verlag
Aktivieren Sie unsere intelligente Suche, um passende Fachinhalte oder Patente zu finden.
Wählen Sie Textabschnitte aus um mit Künstlicher Intelligenz passenden Patente zu finden. powered by
Markieren Sie Textabschnitte, um KI-gestützt weitere passende Inhalte zu finden. powered by
This paper theoretically and empirically investigates the idea that private equity (PE) firms are not an economically superior organizational arrangement to public corporations but may profit from applying forms of parenting activities beyond governance measures. Using a unique sample of 143 global PE firms, evidence that PE firms that actively engage in managing their portfolio companies rather than purely relying on arbitrage and financial leverage add superior value to their shareholders was found. However, while results prove a strong positive association between the engagement of PE firms in actively developing business strategies for the portfolio companies and their overall performance they also show that PE firms underperform if they try to exploit synergies. Beyond providing empirical evidence of the explanatory power of the parenting advantage concept for the PE industry, this paper contributes to theory development in the field of strategic management.