The influence of geography on the success of private equity: investments in listed equity
Author: Stotz, Olaf
Source: Applied Financial Economics, Volume 21, Number 21, 1 November 2011 , pp. 1605-1615(11)
Abstract:This article analyses short-term and long-term wealth effects of private equity investments in target companies which are already listed on a stock exchange. It also examines the importance of geography on both stock returns and accounting returns. In general, risk-adjusted short-term and long-term stock returns of target companies are positive. Also, changes in accounting returns are greater for target companies than for companies of the same industry. With respect to geography it is found that almost all of the positive returns result from private equity investments in target companies from the same country.
Document Type: Research Article
Affiliations: Department of Finance,Frankfurt School of Finance and Management, Sonnemannstr. 9-11, D-60314 Frankfurt am Main, Germany
Publication date: November 1, 2011