How private equity strategies impact the portfolio companies’ performance (Evidence from Norway)

Abstract

This thesis studies the impact of private equity-backing on the portfolio companies they acquire, with evidence from Norway. We are researching the two main strategies in Norway, buyout and venture capital. The impact is measured looking at the change in performance for profitability, leverage, productivity and employment. A peer group for both strategies is created, to compare the performance of private equity-backed companies against non private equity-backed companies. We find that there is an increase in profitability, leverage and productivity compared to the peer groups, however, only for venture capital for the former two. There is also an increase in performance for employment, although this was not in line with recent research. We conclude that portfolio companies perform superior to their matched peer groups.