Secondary Buyouts: Operating Performance and Investment Determinants

Financial Management, Forthcoming

76 Pages Posted: 22 Mar 2010 Last revised: 20 Jan 2015

See all articles by Stefano Bonini

Stefano Bonini

Stevens Institute of Technology - School of Business

Date Written: September 21, 2014

Abstract

Secondary buyouts represent now over 60% of the overall buyout activity. In this paper we investigate the possible determinants of such a spectacular growth. We show that first-round buyers generate a large and significant abnormal improvement in operating performance. In contrast, SBO operating growth is not different from that of the peer group. Returns to secondary PE investors are positive but significantly lower than those of first round buyers. We test several alternative drivers of SBOs and find that favorable credit market conditions and PE reputation drive secondary investment volume.

Keywords: Secondary Buyout, Private Equity, Financial Crisis

JEL Classification: G01, G24, G34

Suggested Citation

Bonini, Stefano, Secondary Buyouts: Operating Performance and Investment Determinants (September 21, 2014). Financial Management, Forthcoming, Available at SSRN: https://ssrn.com/abstract=1571249 or http://dx.doi.org/10.2139/ssrn.1571249

Stefano Bonini (Contact Author)

Stevens Institute of Technology - School of Business ( email )

Hoboken, NJ 07030
United States

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