Fare thee well? an analysis of buyout funds' exit strategies

• Autores: Sven Fürth, Christian Rauch
• Localización: Financial management, ISSN 0046-3892, Vol. 44, Nº 4, 2015, págs. 811-849
• Idioma: inglés
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• Resumen

  • This paper analyzes exit strategies of buyout funds in portfolio companies following initial public offerings (IPOs). We use a data set of 222 buyout-backed IPOs in the United States from 1999 to 2008, including hand-collected data about each exit process, to draw a detailed roadmap of buyout investors' divestment processes. Using this data, we document the timing and aggressiveness of the exit strategies, and analyze to which degree a multitude of possible determinants influence the choice of a given exit strategy. Our results indicate that buyout funds remain invested in their portfolio companies for a substantial period of time after the IPO, and that the choice of a given exit strategy depends not only upon the characteristics of each respective portfolio company, but also on the financial success of the deal from the perspective of the buyout investor.