Competitive strategy of private equity [Elektronische Ressource] : boundary of the investment firm / vorgelegt von Daniel Kukla

Daniel Kukla

Informations

• Publié par: technische_universitat_berlin
• Publié le: 01 janvier 2010
• Nombre de lectures: 10
• Langue: English
• Poids de l'ouvrage: 1 Mo

Extrait

Competitive Strategy of Private Equity:
Boundary of the Investment Firm



vorgelegt von
Diplom-Kaufmann
Daniel Kukla
aus Olmütz



Von der Fakultät VII – Wirtschaft und Management
der Technischen Universität Berlin
zur Erlangung des akademischen Grades
Doktor der Wirtschaftswissenschaften
Dr. rer. oec.

genehmigte Dissertation




Promotionsausschuss:

Vorsitzender: Prof. Dr. Jan Kratzer
Berichter: Prof. Dr. Dodo zu Knyphausen-Aufse β
Berichter: Prof. Dr. Viral V. Acharya


Tag der wissenschatlichen Aussprache: 21.12.2010




Berlin 2011

D 83
Contents



1 Introduction ................................................................................................................................ 1
1.1 Phenomenon and Research Motivation ............................................................................... 1
1.1.1 Practical Relevance . 1
1.1.2 Theoretical Relevance ............................................................................................. 4
1.2 Research Objective ............................................................................................................. 5
1.2.1 Strategic Groups ..................................... 5
1.2.2 Boundary of the Investment Firm ........... 6
1.3 Structure and Scope of Dissertation .................................................................................... 7
2 The Ascent of Private Equity ..................................................................................................... 9
2.1 Origin .................................. 9
th th2.1.1 Classic Private Equity: Merchant Banking (14 – 19 Century) ........................... 9
2.1.2 Merchant Banking Wipeout in 1933 ..................................................................... 11
th2.1.3 Renaissance of Private Equity in the 20 Century ............... 12
2.2 Contemporary Private Equity ............................................................ 16
2.2.1 Capital Commitment ............................................................. 16
2.2.2 Private Equity Investment ..................... 19
2.2.3 Credit Markets ...................................................................... 23
2.2.4 Exits ...................................................................................................................... 24
2.2.5 Performance .......... 26
3 Academic Knowledge on Private Equity ................................................................................ 27
3.1 Synthesis of PE Literature ................................................................................................. 27
3.1.1 Economic Impact .. 29
3.1.2 Asset Allocation .... 36
3.1.3 Design of the Monolithic PE Firm ........................................................................ 38
3.1.4 Governance ........................................... 55
3.1.5 Performance .......... 58
3.2 Strategy for the PE Firm ................................................................... 61
3.2.1 Conceptual Frames Related to Strategy for PE .................... 62
3.2.2 Inadequacy of Existing Business Model Frameworks .......... 64
3.2.3 Business Model Framework for PE Centered Investment Firm ........................... 65
- ii -
4 Research Design ........................................................................................................................ 69
4.1 Purpose Statement ............. 69
4.1.1 Philosophic Worldview ......................... 69
4.1.2 Mixed Methods ..................................................................................................... 71
4.2 General Research Thrust ... 72
4.2.1 Research Thrust: Strategic Groups ....... 72
4.2.2 Research Thrust: Boundary of the Investment Firm ............................................. 73
4.3 Empirical Research Design ............................................................................................... 73
5 Empirical Part I: Strategic Groups ........................ 77
5.1 Conceptual Framework and Hypotheses ........................................................................... 77
5.1.1 IO Research ........................................... 77
5.1.2 From Entry Barriers to Mobility Barriers ............................................................. 78
5.1.3 Strategic Groups ................................... 78
5.1.4 Hypotheses ............................................................................ 80
5.2 Methodology and Data ...... 82
5.2.1 Strategic Space and Strategic Variables ............................................................... 82
5.2.2 Data ....................................................................................... 86
5.2.3 Clustering Firms into Strategic Groups ................................ 88
5.2.4 Validation of Strategic Groups ............. 91
5.3 Empirical Results .............................................................................................................. 93
5.3.1 Correlation Analysis ............................. 93
5.3.2 Clustering Analysis ............................................................................................... 95
5.4 Interpretation and Discussion of Results ........................................ 107
5.4.1 Summary ............................................................................. 107
5.4.2 Limitations .......... 110
5.4.3 Implications ........................................ 111
5.4.4 Further Research ................................................................. 113
6 Empirical Part II: Boundary of the Investment Firm ........................ 115
6.1 Exploratory Framework .................................................................................................. 115
6.1.1 The Nature of the Firm ....................... 115
6.1.2 Conceptual Frames for the Boundary of the Firm .............................................. 117
6.1.3 Six Decades of Firm Boundary Seesaw .............................................................. 119
6.1.4 The Monitor of the Monitor ................................................ 121
6.2 Methodology ................................................... 122
6.2.1 Research Design ................................................................................................. 122
6.2.2 Conversation Guideline ...................... 125
6.2.3 Concurrent Strategic Grouping Approach .......................... 128
- iii -
6.3 Empirical Results ............................................................................................................ 129
6.3.1 Forces Shaping the Boundary of the Investment Firm ....... 129
6.3.2 Bundling of IF Activities .................... 147
6.3.3 Four PE Centered Investment Firm Models ....................................................... 155
6.4 Summary and Discussion ................................................................ 162
7 Conclusion and Outlook ......................................... 165
7.1 Academic Contributions ................................................................. 165
7.2 Implications for Practitioners .......................................................... 166
7.2.1 Implications for Investors ................................................... 166
7.2.2 Implications for PE Centered Investment Firms ................. 167
7.2.3 Implications for Portfolio Companies ................................................................. 168
7.2.4 Implications for Regulators ................ 169
7.3 Outlook for Future Research ........................................................... 170



- iv -
Abbreviations




ANOVA Analysis of Variance
AuM Assets under Management
b Billion
EBITDA Earnings before Interest, Tax, Depreciation, and Amortization
e.g. Exempli gratia (Latin), for example
FDIC Federal Deposit Insurance Corporation
FoF Fund of Funds
FoHF Fund of Hedge Funds
GP General Partner
HNWI High Net Worth Individual
UHNWI Ultra High Net Worth Individual
i.e. Id est (Latin), that is to say, in other words
IF Investment Firm
IRR Internal Rate of Return
JV Joint Venture
KKR Kohlberg Kravis Roberts & Co.
LBO Leveraged Buyout
MBO Management Buyout
LP Limited Partner
m Million
MD Managing Director
M&A Mergers and Acquisitions
IO Industrial Organization
p.a. Per annum (Latin), annually
PE Private Equity
PMI Post Merger Integration
PPM Private Placement Memorandum
SEC Securities and Exchange Commission
SG Strategic Group
SIC Standard Industrial Classification
tr Trillion
TMT Top Management Team
VC Venture Capital
- v -
List of Figures




Figure 1: Structure of KKR in 1976 and in 2010 .............................................................................. 2
Figure 2: Top 100 PE Firms – AuM, % of AuM in PE, PE Funds Raised 2004-2009 ..................... 3
Figure 3: Structure of Dissertation .................................... 7
Figure 4: