Private Equity: A People’s Business? Three Essays on the Human Element in a Maturing Private Equity Industry
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Beschreibung
This dissertation investigates the role and importance of the human element in the private equity industry.
This dissertation investigates the role and importance of the human element in the private equity industry. First, I examine the performance and persistence of individual private equity managers in buyout transactions. I find significant performance heterogeneity in the cross-section of the managers’ investment returns. Managers are about four times as important as private equity firms in explaining the variation in performance. While common human capital characteristics do not correlate with managerial performance, deal returns increase with the industrial expertise of the individual managers. Second, I address managerial career concerns of private equity professionals. I document that the performance of managers affects their individual career outcomes. Thus, career concerns can work as an implicit incentive mechanism if managers anticipate the consequences of their current performance on their career prospects. Focussing on the style drifting behaviour in subsequent deal involvements, I do not find any evidence that managerial career concerns directly influence investment decisions. Third, I assess the effectiveness of strategic CEO replacements as a value lever in buyout investments. Replacing the incumbent CEOs of portfolio companies is positively related to investment performance and changes in operating profitability during the private equity ownership. Private equity firms keep incumbent CEOs if target firms experience strong pre-buyout growth and tend to prefer appointing firm outsiders to promoting internal candidates when looking for suitable successors.
Autor*in
Nils B. Dorau
Promotion an der Technischen Universität München (2016 - 2020)
Themen in »Private Equity: A People’s Business? Three Essays on the Human Element in a Maturing Private Equity Industry«
Private Equity Corporate Finance Corporate Governance Corporate Boards CEOs