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Private Equity LBO Exit Strategies: The Announcement Effect of Trade Sales, Secondary Buyouts and IPO´s on Listed PE

Stromylo, Viktoriia LU and Enzmann, Tobias LU (2017) BUSN79 20171
Department of Business Administration
Abstract
Purpose: To examine the wealth-generating effects of LBO exits from the PEs perspective depending on different exit strategies, and to identify how private sponsors’ features like historical performance, size, experience etc. might influence the success of the exit as well as the exit route choice.
Methodology: A short-term event study to detect a cumulative abnormal return around LBO exit announcement, multivariable regression and multinomial logit regression analyses.
Theoretical perspective: Information asymmetry, signaling theory, adverse selection problem, exit wealth effects.
Empirical foundation: A sample of 209 global LBO exits conducted by 16 listed private equity companies between 1998 and 2016
Conclusion: This paper has... (More)
Purpose: To examine the wealth-generating effects of LBO exits from the PEs perspective depending on different exit strategies, and to identify how private sponsors’ features like historical performance, size, experience etc. might influence the success of the exit as well as the exit route choice.
Methodology: A short-term event study to detect a cumulative abnormal return around LBO exit announcement, multivariable regression and multinomial logit regression analyses.
Theoretical perspective: Information asymmetry, signaling theory, adverse selection problem, exit wealth effects.
Empirical foundation: A sample of 209 global LBO exits conducted by 16 listed private equity companies between 1998 and 2016
Conclusion: This paper has confirmed the existence of positive abnormal return on listed private equity stocks in short run around the LBO exit announcement. A new pecking order of exit strategies in term of wealth generation is found to be trade sale, secondary buyout and IPO. Additionally, we revealed that operating performance and macro conditions in the market significantly influence the intensiveness of LBO exits’ wealth effects. (Less)
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author
Stromylo, Viktoriia LU and Enzmann, Tobias LU
supervisor
organization
course
BUSN79 20171
year
type
H1 - Master's Degree (One Year)
subject
keywords
LBO exit, listed private equity, short-term abnormal return, Information asymmetry, trade sale, secondary buyout, IPO, exit wealth effects
language
English
id
8917053
date added to LUP
2017-07-05 16:27:00
date last changed
2017-07-05 16:27:00
@misc{8917053,
  abstract     = {Purpose: To examine the wealth-generating effects of LBO exits from the PEs perspective depending on different exit strategies, and to identify how private sponsors’ features like historical performance, size, experience etc. might influence the success of the exit as well as the exit route choice.
Methodology: A short-term event study to detect a cumulative abnormal return around LBO exit announcement, multivariable regression and multinomial logit regression analyses.
Theoretical perspective: Information asymmetry, signaling theory, adverse selection problem, exit wealth effects.
Empirical foundation: A sample of 209 global LBO exits conducted by 16 listed private equity companies between 1998 and 2016
Conclusion: This paper has confirmed the existence of positive abnormal return on listed private equity stocks in short run around the LBO exit announcement. A new pecking order of exit strategies in term of wealth generation is found to be trade sale, secondary buyout and IPO. Additionally, we revealed that operating performance and macro conditions in the market significantly influence the intensiveness of LBO exits’ wealth effects.},
  author       = {Stromylo, Viktoriia and Enzmann, Tobias},
  keyword      = {LBO exit,listed private equity,short-term abnormal return,Information asymmetry,trade sale,secondary buyout,IPO,exit wealth effects},
  language     = {eng},
  note         = {Student Paper},
  title        = {Private Equity LBO Exit Strategies: The Announcement Effect of Trade Sales, Secondary Buyouts and IPO´s on Listed PE},
  year         = {2017},
}