This thesis investigates how the fund size and geographic scope of private equity funds influence the strategic choices of the funds, and the operational performance of the portfolio companies. A thorough review of the literature concerning private equity funds, strategic choices and operational performance leads to a theoretical framework. A two-stage path model is developed with the underlying hypotheses that a private equity fund’s geographic scope and size influence its strategic choices, which in turn influence the operational performance. Four key strategic choices are identified: human capital, industrial specialisation, geographic specialisation, and investment size. An empirical study, of a hand-collected data set consisting of 105 transactions conducted in the Scandinavian market in the period of 2005-2014, shows that the strategic choices of a private equity fund are determined by the fund size rather than the geographic scope. Additionally, it is concluded that the strategic choices do not have an economically significant influence on the operational performance. Finally, the thesis hypothesizes that the missing link between strategic choices and operational performance is due to a missing factor in the theoretical model: active ownership.
|Educations||MSc in Finance and Accounting, (Graduate Programme) Final Thesis|
|Number of pages||132|