The Operating Performance of Private Equity Backed Initial Public Offerings in the Nordics during the 2000’s: From a Corporate Governance Perspective

Fredrik Mårfält & Henrik Emilsson

Student thesis: Master thesis


This thesis investigates on the operating performance of private equity (PE) backed initial public offerings (IPOs) using a sample of firms being listed on the Nordic markets (Denmark, Finland, Norway and Sweden) between January 1 st 2000 and December 31 st 2012. The operating performance is measured through various measures of efficiency and profitability, and subsequently investigated on through a matchedpair sample, thus comparing PEbacked IPOs to nonbacked IPOs. The thesis applies a corporate governance perspective and uses agency theory in an attempt to explain the underlying factors behind the development in the operating performance across the sample. Within this framework we investigate on the effects on operating performance of leverage, PEand management ownership, as well as PE board participation. It is argued that these factors should have a positive impact on the operating performance of PE portfolio firms. We find no statistical significance that PEbacked and nonbacked IPOs underperform postIPO, nor do we find that PEbacked IPOs outperform nonbacked IPOs. However, the postIPO performance of PEbacked firms are positively affected and can partially be explained by high levels in PEfund ownership and PE board participation at the time of the IPO. Furthermore, in contrast to nonbacked firms, PEbacked IPOs are larger in terms of total assets, have higher levels of leverage, and exercises tighter control on cost drivers.

EducationsMSc in Finance and Strategic Management, (Graduate Programme) Final Thesis
Publication date2015
Number of pages120