Private Equity Funds in Developed and Emerging Countries: Examination of Investment Criteria and Factors Affecting them

A majority of modern studies note the growth of the private equity industry over the past eight years and its positive impact on the development of the economy. Investment strategies of funds are of particular interest to non-public companies, but the data scarcity and limited methodology restrain results of the analysis. All outcomes revealed only country characteristics which can be important for private equity investments. This work applies an extensive sample that includes 817 private equity and M & A transactions in 57 developed and emerging countries. Determinants of the company performance and its country characteristics are obtained for each dean and considered as investment criteria for a private equity fund. The novelty and practical importance of the work consists in investigating a large number of factors, varying which a non-public company is able to increase its investment attractiveness. The thesis also highly develops econometric tools. In addition to the probit model and OLS regression, there is used a new approach estimating the probability of a firm being acquired by a private equity fund. The results of the work confirm the existence of general investment criteria important for private equity funds. A company with high profitability, low level of debt, located in a country with a high level of GDP, information transparency, low level of corruption and system not centered on banks is the most attractive object of investment.