Wissenschaftliche Studie, 2010
11 Seiten
1. Introduction
2. Turnover categories
3. Expectation of return on equity
4. Probability of new jobs
5. Key performance indicators
6. Conclusion for hypothesis
This study aims to empirically evaluate whether private equity transactions serve as an effective growth accelerator for companies in Germany by analyzing financial performance and employment development.
1. Introduction
The demand in Germany for private equity (PE) has remained high for more than ten years. Until 2008, industry associations assumed that this would impart further momentum to the market, but the strong fundraising of private equity funds recently lost steam. Particularly in times of crisis, private equity companies’ activities are constantly under attack.
In numerous studies and publications – particularly in publications from private equity companies themselves – it is pointed out that investment companies have been supporting the technological and structural transformation of the German economy for decades by investing in fast-growing companies and industries. It is often proclaimed that in this way a contribution was made to restructuring and modernising established industries and developing new economic sectors. By identifying sustainable companies and providing them with additional capital, they secure existing jobs and create new ones over the long term, the studies claim.
At the end of 2006 the PE companies registered in Germany held shares in about 6,000 small and mid-sized companies; in total, these investments generated a volume of about EUR 23 billion. These companies constituted about seven percent of the German gross domestic product in 2006 and earned almost EUR 190 billion annual sales with more than 960,000 employees. The positive economic significance is cited in many publications.
A central hypothesis can thus be formulated: PE-financed companies develop better than average, both as regards the number of employees and in terms of their financial indicators.
1. Introduction: Presents the relevance of private equity in Germany and establishes the central hypothesis regarding the superior development of PE-financed companies.
2. Turnover categories: Analyzes the distribution of investment volumes across different company sizes, highlighting the focus on mid-sized enterprises.
3. Expectation of return on equity: Examines the return expectations of private equity firms, noting high annual targets for deployed equity.
4. Probability of new jobs: Investigates the impact of private equity on employment levels and the likelihood of job creation within portfolio companies.
5. Key performance indicators: Reviews primary success metrics, focusing on operating profit, cash flow, and turnover development.
6. Conclusion for hypothesis: Summarizes the findings and confirms the hypothesis that private equity acts as a growth accelerator despite inconsistent employment trends.
Private equity, Germany, growth accelerator, investment volume, turnover categories, return on equity, job creation, employment, key performance indicators, operating profit, cash flow, portfolio companies, corporate transformation, financial success, empirical study.
The paper examines the economic impact and performance of private equity investments in Germany, specifically testing whether these investments accelerate corporate growth.
The study covers investment size categories, return on equity expectations, job creation potential, and primary financial performance indicators like profit and cash flow.
The primary goal is to determine if PE-financed companies perform better than average in terms of both financial indicators and employment growth.
The author uses an empirical, quantitatively and qualitatively oriented study based on research conducted in 2010 to analyze transaction performance.
The main body analyzes specific data points including turnover segments, return expectations, job creation rates, and key success metrics like operating profit and cash flow.
Key terms include private equity, growth accelerator, investment volume, return on equity, job creation, and operating profit.
This segment is the most pronounced, accounting for 42% of the private equity investments analyzed in the study.
The study finds that job creation does not have the greatest prominence in the success of PE investments, with employment figures showing inconsistent development.
A total of 43% of participants view their work and influence as satisfactory, while 26% consider themselves successful and 4% are very satisfied.
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