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National Research University Higher School of EconomicsStudent ThesesWealth Drivers of Private Equity Funds in M&A

Student
Title
Supervisor
Faculty
Educational Programme
Final Grade
Year of Graduation
Polina Fedorova
Wealth Drivers of Private Equity Funds in M&A
Finance
(Master’s programme)
9
2017
This work paper presents results of the research of value drivers in the merge and acquisition deals organized by private equity funds in the Russian capital market. The research is based on the Residual Income Model (RIM). The data include 202 transactions of M&A deals made during the period from 2008 to 2015. Having estimated the received differences of fundamental costs before and after transactions, the authors have revealed that the M&A deals in the Russian capital market led to a growth of fundamental cost of private equity funds – 64% of deals led to a growth of cost, 78% from which are completed by Russian funds.

Among the analyzed factors exerting positive impact on 5% significance level were the following: age of management company, belonging of fund to venture type of investment, high diversification of investment and also participation of a Russian fund in a M&A deal. The industry analysis has shown that within the studied panel data only two branches render significant (10% significance level) positive influence on PI fund cost: IT and telecommunications, chemical and biotechnologies.

As a result of an empirical research, the six of eight hypotheses haven't been rejected on an acceptable significance level.

Key words: private equity funds, merger and acquisition, Russian apital market, Residual Income Model (RIM), value drivers.

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