Exit Strategies in Private Equity - HAL-SHS - Sciences de l'Homme et de la Société Accéder directement au contenu
Chapitre D'ouvrage Année : 2015

Exit Strategies in Private Equity

Résumé

The main goal of a PE fund manager is to receive a return in excess of the price paid for the companies in the portfolio at the time of exit. Various exit strategies are available to fund managers including a trade sale, which is the sale of the company to another PE firm or a secondary buyout for a medium or large portfolio company. Another way to exit is an initial public offering (IPO). A more recent exit strategy is for the portfolio company to pay a preferred dividend to the PE fund in order to repay the initial invested amount. This strategy is also known as a dividend recapitalization, which is sometimes financed with additional debt. Financial economics can help inform the PE fund’s GPs about the different exit routes. Pecking order theory, agency costs, and information asymmetry each offer relevant scientific arguments explaining the observed behaviors.
Fichier non déposé

Dates et versions

hal-01755063 , version 1 (30-03-2018)

Identifiants

  • HAL Id : hal-01755063 , version 1

Citer

Emmanuel Boutron, Didier Folus. Exit Strategies in Private Equity. Private Equity: Opportunities and Risks , 2015. ⟨hal-01755063⟩
141 Consultations
0 Téléchargements

Partager

Gmail Facebook X LinkedIn More