Table Of ContentThe Oxford Handbook of
PRIVATE EQUITY
Consulting Editors
Michael Szenberg
Lubin School of Business, Pace University
Lall Ramrattan
University of California, Berkeley Extension
The Oxford Handbook of
PRIVATE EQUITY
Edited by
DOUGLAS CUMMING
1
1
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Library of Congress Cataloging-in-Publication Data
The Oxford handbook of private equity / edited by Douglas Cumming.
p. cm.
Includes bibliographical references and index.
ISBN 978-0-19-539158-9 (cloth : alk. paper)
1. Private equity—Handbooks, manuals, etc. I. Cumming, Douglas.
HG4751.O94 2012
332.63’22—dc22
2011007918
1 3 5 7 9 8 6 4 2
Printed in the United States of America
on acid-free paper
Contents
Contributors ix
Introduction 1
Douglas Cumming
PART I. THE STRUCTURE OF PRIVATE EQUITY FUNDS
1. The Private Equity Contract 15
Steven M. Davidoff
2. Direct Investments in Private Firms by Institutional Investors:
Issues and Evidence 37
Kasper Meisner Nielsen
3. The Size and Internal Structure of Private Equity Firms 57
Dodo zu Knyphausen-Aufsess and Marc Koehnemann
PART II. LEVERAGED BUYOUTS: STRUCTURE,
GOVERNANCE, AND PERFORMANCE
4. Leveraged Buyouts and Public-to-Private Transactions 89
Luc Renneboog
5. Private Equity and Public Corporations 131
Jerry Cao
6. Private Equity Governance and Financing Decisions 156
Simona Zambelli
PART III. PRIVATE EQUITY SYNDICATION
7. Syndicate Partner Selection: Who Syndicates with Whom? 199
Peter Roosenboom and Bram W. van den Bosch
vi contents
8. Industry Concentration, Syndication Networks, and Competition
in the U.K. Private Equity Market for Management Buyouts 219
Miguel Meuleman and Mike Wright
9. A Competition Law Analysis of Private Equity “Club Deals” 243
Faysal Barrachdi
PART IV. REAL EFFECTS OF PRIVATE EQUITY
10. The Real Effects of Private Equity Buyouts 271
Joacim Tåg
11. Buyouts in Western European Countries: The Impact on Company
Growth and Innovation 300
Elisa Ughetto
12. The Limits of Private Equity: Evidence from Denmark 327
Thomas Poulsen and Steen Thomsen
PART V. FINANCIAL EFFECTS OF PRIVATE EQUITY
13. Private Equity: Value Creation and Performance 347
Christian Graf, Christoph Kaserer, and Daniel M. Schmidt
14. Do Private Equity Fund-of-Funds Managers Provide Value? 386
April Knill
15. Fund Size, Limited Attention, and Private Equity Valuation 417
Douglas Cumming and Na Dai
16. Private Equity Investors, Corporate Governance, and Performance
of IPO Firms 445
Igor Filatotchev
17. The Role of Private Equity in Private Acquisitions 469
Halit Gonenc and Koos Leisink
18. Private Equity Activism and the Consequences for Targets and
Rivals in Germany 495
Mark Mietzner and Denis Schweizer
19. The Costs of Issuing Private versus Public Equity for
Entrepreneurial Ventures 521
Cécile Carpentier, Jean-François L’Her, and Jean-Marc Suret
contents vii
PART VI. LISTED PRIVATE EQUITY
20. Risk and Return Characteristics of Listed Private Equity 549
Christopher Brown and Roman Kraeussl
21. Listed Private Equity: A Genuine Alternative for
an Alternative Asset Class 579
Matthias Huss and Heinz Zimmermann
22. Listed Private Equity and the Case of Exits 611
Götz Müller and Manuel Vasconcelos
PART VII. INTERNATIONAL PERSPECTIVES ON
PRIVATE EQUITY
23. Buyouts around the World 639
Christian Andres, Andre Betzer, and Jasmin Gider
24. Leveraged Buyouts and Control-Oriented Investments in Asia 667
Grant Fleming and Mai Takeuchi
25. Private Equity in China 694
Takeshi Jingu
Index 719
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Contributors
Christian Andres is full professor of empirical corporate finance at WHU–Otto
Beisheim School of Management in Vallendar, Germany. Before joining WHU he
held appointments at the universities of Bonn and Mannheim. He holds a mas-
ter’s degree and a PhD from the University of Bonn. During his PhD studies, he
spent several months as a visiting scholar at the University of Sheffield and at
the University of Florida, Gainesville. His primary research interests are in the
areas of empirical corporate finance and corporate governance. He has published
in academic journals such as the Journal of Corporate Finance and the Journal of
Empirical Finance.
Faysal Barrachdi is an attorney at law in Rotterdam. He studied international and
European business law at Tilburg University and methods of legal research at the
Catholic University of Leuven. He studied private equity club deals as a researcher
at Tilburg Law and Economics Center.
Andre Betzer holds a bachelor’s degree in economics from the University of
Toulouse. He earned his master’s and PhD degrees in economics from the University
of Bonn. He is full professor of finance at the University of Wuppertal, Schumpeter
School of Business and Economics. His research focuses mainly on issues of corpo-
rate finance and corporate governance. He has published in academic journals such
as European Financial Management, Journal of Business Finance and Accounting,
and Journal of Empirical Finance.
Christopher Brown is a managing director at J.P. Morgan Cazenove, where he
heads the Investment Companies Research Team. His specialist area is listed
private equity. He studied financial economics at Birkbeck College, University of
London.
Jerry Cao is assistant professor of finance at the Singapore Management University.
His research interests span empirical corporate finance and private equity. One of
the key questions he addresses is the role of private equity firms in leveraged buy-
outs and reverse leveraged buyouts. His research articles have been published in
top finance journals such as the Journal of Financial Economics and the Journal
of Quantitative and Finance Analysis, and his studies on private equity have been
widely cited by the Wall Street Journal, Business Week, Forbes, and other financial
journals. Jerry’s other research interests are managerial incentives, venture capital,
and family firms. He is currently a member of the American Financial Association
and the Western Finance Association. He holds a BA in economics from Huazhong
Description:The term private equity typically includes investments in venture capital or growth investment, as well as late stage, mezzanine, turnaround (distressed), and buyout investments. It typically refers to the asset class of equity securities in companies that are not publicly traded on a stock exchange
