Private Equity Investments and Disclosure Policy

Posted: 11 Nov 2004 Last revised: 10 Jan 2011

See all articles by Christof Beuselinck

Christof Beuselinck

Catholic University of Lille - IESEG School of Management

Marc Deloof

University of Antwerp; University of Antwerp - Antwerp Management School

Sophie Manigart

Vlerick Business School; Ghent University

Date Written: June 3, 2008


In the current study, we analyze voluntary disclosure decisions in unlisted firms around private equity (PE) participation events. First, we disentangle the role of disclosure in attracting PE investments. In addition, we examine the extent to which a firm's disclosure policy is affected by the changing corporate setting and intensified corporate governance after having received PE. We find no evidence that firms would employ increased disclosure to signal their quality in the years preceding the PE financing. However, we document a significant switch to increased financial disclosure from the PE investment year onwards, consistent with the hypothesis that PE investor presence positively affects portfolio firms disclosure decisions. Further, we show that the proportional PE ownership stake is positively related to increased disclosure, but only at very high ownership levels. We explain these results in that both internal and external information demands call for higher public disclosure in PE firms. We conclude that the changing information environment resulting from a PE investment stimulates increased public financial disclosure. Our results contribute to illustrate how an indisputable change in governance resulting from a PE investment affects inter-temporal corporate disclosure decisions in unlisted firms.

Keywords: Disclosure choice, private equity, unlisted firms, corporate governance

JEL Classification: G30, M10, M41

Suggested Citation

Beuselinck, Christof and Deloof, Marc and Manigart, Sophie, Private Equity Investments and Disclosure Policy (June 3, 2008). European Accounting Review Vol. 17, No. 4, December 2008, Available at SSRN:

Christof Beuselinck (Contact Author)

Catholic University of Lille - IESEG School of Management ( email )

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Office: A321
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Marc Deloof

University of Antwerp ( email )

Prinsstraat 13
Faculteit TEW
Antwerpen, 2000
+32 3 265 41 69 (Phone)
+32 3 265 47 99 (Fax)

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University of Antwerp - Antwerp Management School ( email )

Boogkeers 5
Antwerp, 2000

Sophie Manigart

Vlerick Business School ( email )

Reep 1
Ghent, BE-9000

Ghent University ( email )

Sint-Pietersplein 7
Gent, 9000

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