Organizational Learning and Capabilities in Private Equity - A Case Study of Nordic Capital's Investment in Bambora

Abstract: Our thesis aims to examine organizational learning and capabilities in a private equity setting: we examine how private equity firms gain, use, and transfer knowledge. We do this through a single case study of Nordic Capital's investment in payments, and in particular their successful investment case Bambora (2014-2017), where a new firm was created through an an aggressive M&A and operational value creation agenda. We discover that in order to create a competitive advantage in the competitive private equity environment that exists today, one should view private equity firms' organizational learning and capabilities as a dynamic value creation component. One could see it as a way of operational knowledge maintenance, or even as an extension within operational engineering in terms of new industry specific knowledge and network accessibility. Hence, how a private equity firm learns is essential, and just as they seek to be experts in financial, governance and operational engineering, private equity firms should become experts in organizational learning in order to develop their capabilities. These findings contribute to the rather unexplored field of organizational learning and capabilities in a private equity setting. Additionally, our entrepreneurial private equity case study is contradictory to traditional private equity investment logics as idea creation occurred before sourcing. Our thesis might provide guidance for further research on organizational learning and capabilities, for instance in a setting where the case was not as successful as the one we look at.