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The transformation of private equity: Value Creation in the second wave of private equity
Uppsala University, Disciplinary Domain of Humanities and Social Sciences, Faculty of Social Sciences, Department of Business Studies.
Uppsala University, Disciplinary Domain of Humanities and Social Sciences, Faculty of Social Sciences, Department of Business Studies.
2015 (English)Independent thesis Advanced level (degree of Master (Two Years)), 300 HE creditsStudent thesis
Abstract [en]

Purpose: The aim of this thesis is to provide evidence to what actions private

equity owners take to enhance its portfolio firm’s value creation. It also shines

light on how these actions are carried out, as well as the underlying reasons for


Research question: What actions are taken by private equity owners in order to

create value in their portfolio firms?

Theoretical framework: The theoretical framework for this thesis is based on

Kaplan & Strömberg’s (2009) categorization of actions actuated by the new

ownership into financial-, governance-, and operational engineering. This

theoretical platform will act as the foundation for the analysis of what changes

that follows a leveraged buyout and how they are connected to the portfolio firm’s

value creation.

Research methodology: The thesis adopts a multiple case study design based

on a mixture of quantitative- and qualitative methods.

Conclusions: The thesis provide indications that the way private equity

ownership creates value for its portfolio firms has changed from being a result of

primarily financial engineering to being an outcome of governance- and

operational engineering. Even if there still is evidence of that financial

engineering is a requirement for the private equity firm, arguments can be made

that the value that is added by the leveraged buyout indirectly derives from

governance engineering and directly from operational engineering. The changes

with highest influence on value creation are improvements of the portfolio firm’s

capital efficiency and strategy.

Place, publisher, year, edition, pages
2015. , 54 p.
Keyword [en]
Private equity, leveraged buyout, value creation, financial engineering, governance engineering, operational engineering
National Category
Business Administration
URN: urn:nbn:se:uu:diva-256098OAI: diva2:824626
Educational program
Master Programme in Business and Management
Available from: 2015-06-22 Created: 2015-06-22 Last updated: 2015-06-22Bibliographically approved

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