- Series Information
- The Private Equity Contract
- Direct Investments in Private Firms by Institutional Investors: Issues And Evidence
- The Size and Internal Structure of Private Equity Firms
- Leveraged Buyouts and Public-to-Private Transactions
- Private Equity and Public Corporations
- Private Equity Governance and Financing Decisions
- Syndicate Partner Selection: who Syndicates with Whom?
- Industry Concentration, Syndication Networks, and Competition in the U.K. Private Equity Market for Management Buyouts
- A Competition Law Analysis of Private Equity “Club Deals”
- The Real Effects of Private Equity Buyouts
- Buyouts in Western European Countries: The Impact on Company Growth and Innovation
- The Limits of Private Equity: Evidence from Denmark
- Private Equity: Value Creation and Performance
- Do Private Equity Fund-of-Funds Managers Provide Value?
- Fund Size, Limited Attention, and Private Equity Valuation
- Private Equity Investors, Corporate Governance, and Performance of Ipo Firms
- The Role of Private Equity in Private Acquisitions
- Private Equity Activism and the Consequences for Targets and Rivals In Germany
- The Costs of Issuing Private Versus Public Equity for Entrepreneurial Ventures
- Risk and Return Characteristics of Listed Private Equity
- Listed Private Equity: A Genuine Alternative for an Alternative Asset Class
- Listed Private Equity and the Case of Exits
- Buyouts Around the World
- Leveraged Buyouts and Control-Oriented Investments in Asia
- Private Equity in China
Abstract and Keywords
This article analyzes Danish evidence on the limitations of private equity, which show that in some cases, the real effects of private equity are not always desirable. It argues that the expropriation of stakeholders—particularly employees that have made firm-specific investments—can be a suboptimal strategy that would result in counterproductive and ultimately value-destroying behavior. It then discusses the investment decision rule and the buyout of Royal Scandinavia, a Danish art industry conglomerate. This article concludes with a summary of several lessons, which serve as propositions for future research and practice.
Thomas Poulsen is an assistant professor in the Department of International Economics and Management at Copenhagen Business School and a core member of the Center for Corporate Governance, also at Copenhagen Business School. With a view to his background in corporate finance, his current research focuses on issues related to ownership structure, in particular the voting power of shareholders, and private equity.
Steen Thomsen is a professor in the Department of International Economics and Management at Copenhagen Business School and director of the Center for Corporate Governance, also at Copenhagen Business School. He specializes in corporate governance as a teacher, researcher, consultant, commentator, and practitioner. Current research interests include industrial foundations, board structure, corporate governance, and dynamic efficiency.
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