Private Equity's Effect on Financial Fragility in Sweden

Abstract: Does private equity ownership impact financial stability during an economic crisis in Sweden? Through examining Swedish private equity owned companies' investment, funding and performance patterns, it is found that private equity backed companies have a positive effect on the economy relative to their non private equity owned counterparts. The empirical results show that private equity backed companies decreased their capital investments and debt issuance less than the non private equity backed companies, enabling them to uphold investment activity. The thesis provides suggestions for, and understandings of, the future in terms of how the financial performance and fragility will be affected during unstable periods.