Value creation in private equity firms: Is value creation connected to ownership structure?

Sammanfattning: In this study we examine value creation by private equity firms through looking at changes in RONA metrics for a group of private equity owned companies during the holding period and then compare the results to an industry group to determine the difference. Furthermore, we adjust for measurement bias to eliminate the effect of earnings management. We use a sample of 42 private equity divestments of Swedish companies in the period 2008-2017, both including divestments in the public and private markets. Our results show that private equity owned companies outperform non-private equity owned companies, both when looking at measures including as well as excluding the effect of earnings management. The result that private equity firms generate a superior performance regarding value creation is consistent with previous research.