Anmerkungen:
In: THE HANDBOOK OF PRIVATE EQUITY, Forthcoming
Nach Informationen von SSRN wurde die ursprüngliche Fassung des Dokuments August 23, 2010 erstellt
Beschreibung:
The public listing of shares from private equity houses and funds has dramatically changed the corporate governance structure of these entities. These changes aggravate the information asymmetry between investors and general partners, and as a result most of these companies trade at high discounts to their net asset value. We hypothesize that exits of portfolio firms can be seen as a mechanism to mitigate such information asymmetries and to signal quality to uninformed investors. Consistent with our hypotheses, we find that exit announcements trigger significantly positive abnormal returns of almost 1% around the announcement day, and that these are higher when an IPO is the mechanism chosen, the stock runup is lower, and the listed private equity entity is of smaller dimension or lesser reputation