Winning a Deal in Private Equity: Do Educational Ties Matter?

39 Pages Posted: 4 Jun 2016 Last revised: 24 Aug 2018

See all articles by Florian Fuchs

Florian Fuchs

University of St. Gallen - School of Finance

Roland Füss

University of St. Gallen - School of Finance

Tim Jenkinson

University of Oxford - Said Business School; European Corporate Governance Institute (ECGI)

Stefan Morkoetter

University of St. Gallen - School of Finance

Date Written: July 1, 2018

Abstract

In this paper, we investigate the role of educational ties in private equity. We find that educational ties between the management teams of acquiring funds and the target company are more likely for the acquiring fund compared to a set of benchmark funds, which did not invest in the same company. We argue that educational ties between fund managers and CEOs of target companies play a (positive) role in sourcing deals and winning competitive transactions. Exclusivity of educational ties tends to matter more than the university from which it derives. However, the evidence that such educational ties produce higher returns for investors is limited at best.

Keywords: Buyout, Deal Sourcing, Deal Performance, Educational Ties, Investment Choice

JEL Classification: G11, G15, G24, G34

Suggested Citation

Fuchs, Florian and Füss, Roland and Jenkinson, Tim and Morkoetter, Stefan, Winning a Deal in Private Equity: Do Educational Ties Matter? (July 1, 2018). AFFI/EUROFIDAI, Paris December 2016 Finance Meeting EUROFIDAI - AFFI; University of St.Gallen, School of Finance Research Paper No. 2017/15. Available at SSRN: https://ssrn.com/abstract=2787578 or http://dx.doi.org/10.2139/ssrn.2787578

Florian Fuchs (Contact Author)

University of St. Gallen - School of Finance ( email )

Unterer Graben 21
St.Gallen, CH-9000
Switzerland
+65 6850 7334 (Phone)
+41 71 224 70 88 (Fax)

Roland Füss

University of St. Gallen - School of Finance ( email )

Unterer Graben 21
St.Gallen, CH-9000
Switzerland
+41 (0)71 224 70 42 (Phone)
+41 (0)71 224 70 88 (Fax)

HOME PAGE: http://www.sbf.unisg.ch/en/Lehrstuehle/Lehrstuhl_Fuess.aspx

Tim Jenkinson

University of Oxford - Said Business School ( email )

Park End Street
Oxford, OX1 1HP
United Kingdom
+44 1865 288916 (Phone)
+44 1865 288831 (Fax)

HOME PAGE: http://www.sbs.oxford.edu/timjenkinson

European Corporate Governance Institute (ECGI)

c/o ECARES ULB CP 114
B-1050 Brussels
Belgium

HOME PAGE: http://www.ecgi.org

Stefan Morkoetter

University of St. Gallen - School of Finance ( email )

Unterer Graben 21
St.Gallen, CH-9000
Switzerland

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