Værdiskabelse i Kapitalfondsejede danske selskaber

Line Rødkær Bille Knudsen & Philip Kindtler Clausen

Student thesis: Master thesis


Private Equity funds (PE-funds) and their way of doing business has drawn a lot of attention from the medias and the general society in recent years in Denmark. Within the last couple of years major Danish companies have been sold off to PE-funds, and the way the PE-funds have been portrayed in the medias has led to a lot of suspicion regarding the way they work. The public discussions have revolved around whether or not the PE-funds create value in and for their portfolio companies. This study aims to uncover what drives the value creation in the portfolio companies and to what extend the value creation can be determined by support from existing theory and literature. Further, the value creation in the portfolio companies will be compared to a group of comparable control companies similar to the portfolio companies in size and branch. To examine the value creation for our sample of companies we have chosen to analyze the well-known Economic Value Added (EVA) measure on companies owned by PE-funds in the period 2010-2013. We apply the EVA measure to a group of 73 portfolio companies and 74 comparable control Companies. We construct a qualitative and a quantitative analysis to examine what drives value creation in the portfolio firms. The analysis are based on distributions of EVA obtained on basis of a combination of existing literature and studies; size of the PE-funds, nationality of the PE-funds, age of the PE-funds, ownership share, entry year and branches. The qualitative analysis shows that Danish PE-funds performs worse than foreign PE-funds in creating value in portfolio companies and that the size of the PE-funds matters to the size of EVA. We find that more value is created in the portfolio companies where PE-funds own the majority of the stocks, and that less value is created in the portfolio companies acquired before 2008. We construct a multiple linear regression to test the statistical significance of these findings. The results from the regression show that only the size of PEfunds and entry year have a significant effect on EVA. In order to determine whether the portfolio companies create more or less value than the comparable control companies, we have examined which of the two groups of companies creates most value. A qualitative analysis based on distribution of EVA on branches show that the control companies create more value than the portfolio companies. Again we find it useful to examine the findings statistically to verify the results. Through a multiple linear regression we find that it has a significant negative effect on EVA to be a portfolio company. Thus, the results show that the criticism society has towards PE-funds might be entitled.

EducationsMSc in Finance and Accounting, (Graduate Programme) Final Thesis
Publication date2015
Number of pages201