The effect of general partner experience on portfolio company growth

Abstract

In this thesis, I study the relation between private equity fund managers' experience and the growth of their portfolio companies. I use a sample of 337 buyouts and venture capital-backed portfolio companies of Finnish investors. In this study, I refer to previous literature, such as Kaplan and Schoar (2005), which suggests that investors' experience measured by the fund sequence number implies better fund performance. My study is a new addition to the existing literature, as it studies one part of the portfolio company's performance – its growth rate. The findings suggest that the general partner's experience positively impacts the compounded annual growth rate of revenue and personnel of the portfolio company.