The Effects of Business Angels, Private Equity and Lead Managers on the Performance of North African IPO Firms

24 Pages Posted: 25 May 2010

See all articles by Bruce Allen Hearn

Bruce Allen Hearn

University of Southampton; University of Bradford - School of Management

Date Written: May 25, 2010

Abstract

This paper examines the interrelationship between business angel and private equity/venture capital investors with lead managers and their effects on IPO firm performance in the North African region. Using a unique and comprehensive dataset of 63 locally listed IPO firms from across North Africa we find evidence of strategic interaction between foreign private equity investors and foreign lead managers. While there is evidence that business angels value private equity involvement in firms there is little evidence of business angel participation in firm financing having any effect on private equity involvement. However the evidence suggests that business angels given their closer and more intrusive involvement with management are preferable as a governance mechanism than private equity investors who tend only to engage high value firms with relatively little financial gearing.

Keywords: IPO, Underpricing, Family Firms, North Africa, Agency Theory

Suggested Citation

Hearn, Bruce Allen, The Effects of Business Angels, Private Equity and Lead Managers on the Performance of North African IPO Firms (May 25, 2010). Available at SSRN: https://ssrn.com/abstract=1615744 or http://dx.doi.org/10.2139/ssrn.1615744

Bruce Allen Hearn (Contact Author)

University of Southampton ( email )

University Rd.
Southampton SO17 1BJ, Hampshire SO17 1LP
United Kingdom

University of Bradford - School of Management ( email )

Emm Lane
Bradford, West Yorkshire Bd9 4JL
United Kingdom

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