Private Equity Monitoring in Public Firms

47 Pages Posted: 3 Jun 2015

See all articles by Stefan Petry

Stefan Petry

University of Manchester - Alliance Manchester Business School

Date Written: June 2, 2015

Abstract

This paper finds private equity (PE) firms to have an active monitoring role in stock market-listed companies. Little is known about the governance role of PE investors in publicly listed firms. Using a novel dataset of the ownership structures of firms listed on the German stock market, I find a higher likelihood of forced CEO replacements after poor past firm performance in companies with higher PE ownership. The PE monitoring effect only exists if representatives of the PE firm sit on the board of the portfolio firm. PE ownership is generally associated with higher firm value.

Keywords: Private Equity, Institutional Ownership, CEO turnover, Monitoring, Germany

JEL Classification: G32, G34

Suggested Citation

Petry, Stefan, Private Equity Monitoring in Public Firms (June 2, 2015). FIRN Research Paper No. 2613448, Available at SSRN: https://ssrn.com/abstract=2613448 or http://dx.doi.org/10.2139/ssrn.2613448

Stefan Petry (Contact Author)

University of Manchester - Alliance Manchester Business School ( email )

Booth Street West
Manchester, M15 6PB
United Kingdom

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