London Business School Coller Institute of Private Equity

PRIVATE EQUITY FINDINGS | ISSUE 6 - SUMMER 2012

28 May 2012

Issue 6 of Private Equity Findings is now available for download. Issue 6 commences with an interview with Nader Tavassoli, Professor of Marketing at London Business School who was a keynote speaker at our 2011 Symposium. Professor Tavassoli argues that there is still substantial work PE firms can do to build their brands. He also suggests that in order for firms to differentiate themselves, employees must be at the epicentre of their strategy. This edition also examines corporate culture, another ‘soft issue’ PE firms need to consider, especially if they invest in emerging markets. We look at the case study of Mekong Capital, a Vietnamese private equity firm, which underwent a cultural transformation process to instil a greater sense of accountability in its investment team. This case study is drawn from International Private Equity, an authoritative textbook authored by Professors Eli Talmor and Florin Vasvari of London Business School. Moving away from ‘soft issues’, we examine how PE has performed as an industry, featuring a ground breaking piece of research which was first presented at a Coller Institute event in February 2012. Using an extensive dataset, this research provides evidence of PE substantially outperforming public markets. One driver of performance in the industry, especially pre-financial crisis, has been the use of leverage. However, has PE ownership per se increased the chances of default of its portfolio companies? Also, in times of distress, how effective has PE been in influencing the outcome of distressed restructurings? We examine these questions and others in an examination of a recent research paper on the topic. Our round table in Issue 6 examines bidding behaviour of PE firms compared with strategic acquirers. Looking at three research papers in the area, we evaluate the factors influencing prices paid, the circumstances in which PE may pay more and whether PE reneges on agreed deal terms. The final article in Issue 6 looks at the paper which won the 2011 Coller PhD Prize. This research studies the effect of IPOs on the level of innovation, comparing the results to VC-backed IPOs. In Coller Institute news, we provide coverage of our recent research and case studies, our events and also our Findings App and forthcoming Events app. We welcome your thoughts and perspectives on the topics discussed in this issue of Findings. In addition to our survey at www.collerinstitute.com/Feedback, we invite you to supply your views via our website blog or by email at collerpe@london.edu. The most interesting comments will receive a copy of International Private Equity, authored by Professors Eli Talmor and Florin Vasvari of London Business School.

You need to login to download this publication.