Portfolio Strategies of Private Equity Firms (eBook)

Dr. Ulrich Lossen promovierte bei Prof. Dietmar Harhoff, Ph.D. am Institut für Innovationsforschung, Technologiemanagement und Entrepreneurship der Universität München. Er ist Projektleiter für Unternehmensentwicklung der Leoni Kabel Holding GmbH & Co. KG, Roth.

Foreword 6
Acknowledgements 7
Table of Contents 9
List of Figures 12
List of Tables 13
List of Abbreviations 15
Chapter 1 Introduction 16
1.1 Portfolio strategies of private equity .rms 16
1.2 Objective of thesis 18
1.3 Basics of private equity .nancing 19
1.4 Structure of thesis 21
Chapter 2 Related literature and previous research 22
2.1 Introduction 22
2.2 Return and risk of private equity investing 23
2.3 Portfolio strategies and optimal structure of private equity funds 28
2.4 Summary: research gaps and contribution of thesis 30
Chapter 3 Optimal level of diversi.cation in private equity funds 32
3.1 Introduction 32
3.2 Modern portfolio theory 33
3.3 Optimal number of investment clusters 35
3.4 Summary: implications for empirical analysis 46
Chapter 4 Construction of data set and variables 47
4.1 Introduction 47
4.2 Data sets used by other authors 48
4.3 Description of data set used in this thesis 50
4.4 Description of variables 57
4.5 Summary: advantage and drawback of data set 68
Chapter 5 Choice of portfolio strategies by private equity . rms 70
5.1 Introduction 70
5.2 Data and key variables 71
5.3 ‘Naive’ diversi.cation across portfolio companies 75
5.4 ‘Systematic’ diversi.cation across .nancing stages, industries, and countries 82
5.5 ‘Dynamic’ diversi.cation across time 98
5.6 Summary: importance of market conditions and . rm characteristics 104
Chapter 6 Performance of private equity funds: does diversi . cation matter? 108
6.1 Introduction 108
6.2 Impact of diversi.cation on private equity funds’ performance 109
6.3 Descriptive analysis 112
6.4 Multivariate analysis 120
6.5 Summary: two basic strategies to increase rate of return 143
Chapter 7 Summary 147
Bibliography 151
Appendix A Appendix chapter 3 157
A.1 Expected rate of return and risk of an investment cluster 157
A.2 Risk of a fund 158
A.3 Optimal number of investment clusters 159
A.4 Comparative statics 160
Appendix B Appendix chapter 4 162
Appendix C Appendix chapter 5 164
Appendix D Appendix chapter 6 171