The Exit Behaviour of Private Equity Investors post IPO: Evidence from the Nordics

Sammanfattning: This paper analyses the exit behaviour of private equity (PE) firms in portfolio companies following initial public offerings (IPOs). I use a dataset of 80 PE-backed IPOs, whereof 21 venture capital-backed and 59 buyout-backed, in the Nordic region from 2002 to 2015, to draw a detailed roadmap of PE investors' divestment processes. With the help of hand-collected data about each exit process, I document the timing and aggressiveness of the exit strategies, and analyse how PE firms time their post-IPO exit versus bull and bear markets. My results indicate that PE firms in the Nordic countries remain invested in their portfolio companies for a substantial period of time after the IPO, and that the PE investors adjust their exit behaviour over time, exiting their portfolio companies quicker and slightly more aggressively in bull markets than in bear markets.