Browsing by Author "Juntunen, Sampsa"

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M&A due diligence and the emphasis on internal control systems of the target company
(2022) Juntunen, Sampsa
School of Business | Bachelor's thesis
As global financial markets have been opening to the public, there has emerged a need for transparency of internal controls in public companies. At the same time, the mergers and acquisitions (M&A) activity has been in a steady uptrend throughout the business cycles for the past several decades. Through increased capital involved in these transactions, transparency can benefit the market at large. To add to the extensive number of studies made regarding pre-decision controls of the acquiring company, this thesis focuses on the internal controls of the target company. The objective is to determine: How in-depth are these systems examined during the transaction, and which factors influence the importance of due diligence on them? The thesis consists of a meta-analysis of studies on the cost-benefits of internal control in limited liability companies, how internal controls are considered during the M&A due diligence process, and the implications for post-deal performance. In addition, this thesis includes a field study through in-person interviews with four professionals. This thesis found that as the research on the link between corporate governance and company performance can be seen increasing, many studies have still been inconclusive. The importance of internal control systems varies greatly between industries and particular organizational traits, and it also translates to M&A due diligence. In this thesis, it has been concluded that most M&A transactions are already labor-extensive, and internal controls are rarely examined directly. In most cases, the limited resources and time in hand are seen better in use elsewhere than in the targeted assessment of internal controls of the target company.
Private equity for the masses: General partners going public and Its impact on the private equity fund returns
(2024) Juntunen, Sampsa
School of Business | Master's thesis
This thesis examines the impact of private equity (PE) fund managers’ initial public offerings (IPOs) on fund-level performance. It focuses on whether the best-performing PE fund managers capitalize on their previous performance to go public and whether the performance declines post-IPO. The thesis uses a dataset of 12,073 funds sourced from Preqin. It employs Coarsened Exact Matching (CEM), several OLS regression models, and Difference-in-Differences (DiD) analysis, with additional robustness checks to ensure validity. The findings reveal that pre-IPO, the funds managed by soon-to-be public PE fund managers (LPEs) are substantially larger and are essentially on par with the traditional private equity funds (TPEs) in performance. Post-IPO, this size difference increases, and performance weakens by -2.1%pp on Internal Rate of Return (IRR) and -0.26 on Total-Value-Paid-In-Capital (TVPI) compared to the peers. Besides the “IPO effect”, the most significant contributors to the underperformance are the increased fund size and the fact that the LPEs are deviating more from their PE fund manager’s stated primary strategy. This thesis contributes to the understanding of IPO impact within the PE sector, an area that has been mainly unexplored. The results help to fill this recognized knowledge gap and provide insights for PE managers and investors, emphasizing the importance of strategic alignment and operational adaptability when reaching out to the public markets.