Private Equity Engineering - A study of Value-Creating Actions Undertaken by Private Equity Firms in Sweden

Abstract: Title: Private Equity Engineering - A study of Value-Creating Actions Undertaken by Private Equity Firms in Sweden Seminar date: 3rd of June 2019 Course: BUSN79, Degree Project in Accounting and Finance, 15 ECTS Authors: Jimmy Enhammar & Jesper Qvenild Advisor: Håkan Jankensgård Keywords: Private Equity, Value Creation, Financial Engineering, Operational Engineering, Governance Engineering Purpose: The purpose of this study is to explore the effects of value-creating actions that are undertaken by PE-firms on their portfolio companies on the Swedish market. Methodology: Quantitative method with a deductive approach. Theoretical perspectives: Value Creation Framework including Financial, Governance and Operational Engineering. Empirical foundation: The empirical foundation has been obtained from Bloomberg and the Swedish House of Finance. The sample consists of 74 PE acquisitions from 2007 to 2017, and a peer group of 74 public firms. Conclusions: We conclude that a mix of operational and governance engineering primarily drives the value creation process during the holding period. Financial engineering, on the other hand, seems to be less important in terms of value creation.