Private Equity Funds and Acquisition Multiples in the BRIC

Imagem de Miniatura
Olivares, Rodrigo Henriques
Pinho, Paulo José Jubilado Soares de
Tipo de documento
Trabalho de Evento
Título da Revista
ISSN da Revista
Título do Volume
Projetos de Pesquisa
Unidades Organizacionais
The Private Equity (PE) activity has been growing globally. It represents a significant stake of merge and acquisition (M&A) transactions. We expect that Private Equity managers pay lower prices than non-PE bidders. Their cost of capital reflect illiquidity premium, usually there are no synergy gains in PE deals, they are recurrent players in M&A, and some entrepreneurs accept lower offer prices from PE in exchange of fund’s know-how and certification effect. The objective of this article is to investigate if the PE acquisition multiples are lower than non -PE multiples in the BRIC countries (Brazil, Russia, India and China). Those emerging market countries raised a lot of PE capital recently, and funds should be efficient to deliver a premium for emerging markets. We run multiple linear regression and propensity score matching. Our results showed that on average PE funds had lower multiples than non-PE funds, but this is not the case in all the BRIC countries. When we run the regressions for countries individually, only Russia and China had a significant discount in the acquisition multiple, indicating that PE deal flow and discipline for investing differ in the BRIC.

Titulo de periódico
Título de Livro
Membros da banca
Área do Conhecimento CNPQ
Ciências Exatas e da Terra