The Heterogeneity of Private Equity Firms and its Impact on Post-Buyout Performance: Evidence from the United Kingdom

27 Pages Posted: 16 Jan 2006 Last revised: 9 May 2013

See all articles by Federico Munari

Federico Munari

University of Bologna - Department of Management

Robert Clive Cressy

Birmingham Business School

Alessandro Malipiero

University of Bologna - Department of Management

Date Written: January 1, 2006

Abstract

This paper examines the impact of the degree of specialization of private equity firms on the post-buyout performance of acquired companies. We establish theoretically the likely effects of three different dimensions of specialization: the affiliation of the PE firm (independent vs. captive) together with its industry and stage focus. We then test our hypotheses on a sample of 89 UK buyouts, with a control group of 89 private companies matched by size and industry. In line with the predictions of the resource-based view of the firm, our results show that buyouts by more specialized PE firms tend to have higher post-buyout profitability levels.

Keywords: buyouts, private equity, performance, specialization

JEL Classification: G24, G34

Suggested Citation

Munari, Federico and Cressy, Robert C. and Malipiero, Alessandro, The Heterogeneity of Private Equity Firms and its Impact on Post-Buyout Performance: Evidence from the United Kingdom (January 1, 2006). Cressy, R., Malipiero, A., Munari, F. (2007), “Playing to their strengths. Evidence that specialization in the Private Equity industry confers competitive advantage”, Journal of Corporate Finance, Special Issue on “Private equity, Legeraged Buyout and Corporate Governance”,13(4): 647-669 , Available at SSRN: https://ssrn.com/abstract=876169 or http://dx.doi.org/10.2139/ssrn.876169

Federico Munari (Contact Author)

University of Bologna - Department of Management ( email )

Piazza Scaravilli 1
Bologna, Bologna 40126
ITALY
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051-2093949 (Fax)

Robert C. Cressy

Birmingham Business School ( email )

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Birmingham
Great Britain
012 1414 5609 (Phone)

Alessandro Malipiero

University of Bologna - Department of Management ( email )

Piazza Scaravilli 1
Bologna, BO 40126
Italy

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