by Ignacio Hidalgo Perea

Abstract 

In this paper, I explore the impact Private Equity ownership has on portfolio companies post-exit. This thesis aims to add to the discussion of whether the proliferation of Private Equity in the United States is a positive development for the country. Using a proprietary dataset that compiles thousands of IPOs between the years 2000 and 2016, I look at whether there are significant differences in performance between IPOs that come from Private Equity firms and those that go public on their own. Specifically, I use empirical analysis with robust regression to estimate the effects of Private Equity ownership on four key measures of financial success: MCAP growth, Revenue Growth, EBITDA Margin, and EV / EBITDA multiple. By looking at the changes in these measures of performance across three different time windows: 3 years post-IPO, 6 years post-IPO, and 9 years post-IPO, this paper determines how Private Equity ownership affects company performance post-exit and whether those effects persist over time.

Professor Grace Kim, Faculty Advisor

JEL Codes: G23, G24

View Thesis