Operating Performance of Private Equity Backed Initial Public Offerings in Emerging Markets: An Empirical Analysis of the Post-issue Operating Performance of Private Equity Backed Initial Public Offerings in Emerging Markets and how Private Equity Characteristics Affect Their Performance

Cecilie Glamann

Student thesis: Master thesis


This thesis examines the post-issue operating performance of a sample of 82 PE-backed IPOs in emerging markets (mainly China and India) in the period 2008-2012. Based on a comparison with a matched-pair sample, it is concluded that the development in the performance of PE-backed IPOs is superior in the short run to that of non-backed IPOs. This conclusion is based on the finding that the operating performance of both samples declines post-IPO, but the performance of the PE-backed sample declines less than that of the non-backed sample. This finding is only significant in the year of the IPO and the following year. Moreover, the analysis indicates that the non-backed sample performs better in absolute terms during the entire period. Neither of the selected accounting items (revenue, COGS, current ratio, or Capex) aid in explaining this difference. The investigation of the market expectations shows that non-backed IPOs generally trade at higher M/B and P/E ratios, which is to be expected given that the findings indicate that non-backed IPOs perform better than PE-backed IPOs. Finally, this thesis finds evidence in favor of a positive correlation between the holding period of the PE fund and subsequent performance of the IPO. It is concluded that the retained share or changes in leverage do not explain the change in operating performance of PE- backed IPOs.

EducationsMSc in Finance and Investments, (Graduate Programme) Final Thesis
Publication date2017
Number of pages94