The Impact of Secondary Buyouts on Private Equity Fund Performance - Evidence from North America
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School of Business |
Bachelor's thesis
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Authors
Suonio, Teo
Date
2018
Department
Major/Subject
Mcode
Degree programme
Rahoitus
Language
en
Pages
20+7
Series
Abstract
Secondary Buyouts (SBOs) have evolved quickly and the understanding of value creation through such transactions is still limited. This thesis analyzes the impact of Secondary Buyout investments and exits on Private Equity fund performance. Earlier papers study the operational improvements in Secondary Buyouts and deal level effects on private equity fund performance, however leaving research regarding fund level effects with less attention. Cross-sectional dataset, comprising 797 North American buyout funds with vintages 1980-2009, is analyzed using OLS linear regression model. Using Internal Rate of Return (IRR) and DPI multiple to measure fund performance, I find that larger share of SBO investments result in higher performance and this effect seem to be stronger for smaller funds. On the contrary, I find no significant evidence that higher share of SBO exits have an impact on fund performance.Description
Thesis advisor
Ungeheuer, MichaelKeywords
secondary buyouts, private equity, internal rate of return, multiple, transaction