Langsigtet performance på kapitalfondsejede og ikke-kapitalfondsejede børsnoteringer på det tyske og britiske marked: Ud fra et corporate governance perspektiv

Kasper Post Lyngbirk & Frederik Holm

Student thesis: Master thesis


Even though private equity has been a widespread phenomenon since the beginning of the 1970s, only a limited number of studies have been published in relation to how PE-backed IPOs perform. In addition, even fewer studies try to explain potential differences in performance between PEbacked and non-PE-backed IPOs. This thesis analyses the long-term performance of PE-backed IPOs through a sample of IPOs made on the German and British markets during the period 2000-2014. The long-term performance is analysed by the use of different methods where different benchmarks are in focus. Further, the thesis chooses to use a broad corporate governance perspective to try to explain the differences between PE-backed and non-PE-backed IPOs with select factors, which are expected to have a positive effect on the abnormal return.
This study supports the current literatures’ empirical findings within the area of IPOs’ long-term performance. In general, the study finds that IPOs have a negative abnormal return in relation to a general market index, which indicates that the average German and British IPO underperforms after the first 3 years of listing. There is however a difference in performance when PE-backed IPOs and non-PE-backed IPOs are compared. Overall, the study finds statistical evidence for PEbacked IPOs performing better than non-PE-backed. In addition, the study partly identifies a positive relation between CEO incentives and the long-term performance on the British market, though this relation is not identified on the German market. Further, the study finds no statistical evidence for a positive relation between long-term performance and the two other select corporate governance variables, degree of leverage and size of the largest block holder. As a result, the study concludes that governance can only mildly explain the difference in performance between the two groups.

EducationsMSc in Finance and Accounting, (Graduate Programme) Final Thesis
Publication date2018
Number of pages129