The Impact of Private Equity and Venture Capital Funds on post-IPO Operational and Financial Performance in Brazilian invested companies

Sincerre, Bianca Piloto; Sampaio, Joelson Oliveira; Famá, Rubéns; Flores, Eduardo

doi:10.15728/bbr.2019.16.1.6

Cited by 5 publications

(3 citation statements)

References 24 publications

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“…For Rossi and Martelanc (2013), this is because the practices of such funds tend to create value for the covered companies, mitigating the effects of information asymmetry, signaling good conduct for market agents. So much so that Minardi et al (2013) identified significant abnormal returns in favor of companies covered by private equity funds, as well as Sincerre, Sampaio, Famá, and Flores (2019), who found that such companies have higher sales growth and long-term profitability.…”

Section: Hypotheses Developmentmentioning

confidence: 99%

The Tradeoff Between Private Equity Sponsorship, Board Centrality, and Experience as Credible Signals for IPO Performance

et al. 2023

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Private equity funds implement various management and governance practices in firms they endorse, signaling higher quality of sponsored IPOs (Initial Public Offer). However, the participation of such PE funds comes at a cost for newcomer firms, as they may lose both autonomy and future post-IPO earnings. If they do not choose to signal quality through PE funds, the IPO literature points to the validity of other mechanisms, such as the experience and centrality of the board of directors. We theorize and test the effect of the tradeoff between private equity sponsorship and board centrality and experience on IPO performance. We analyzed the effects of signaling on long-term performance through the one-year cumulative abnormal return in Brazilian IPOs issued between 2004 and 2013. Our results indicate that private equity sponsorship is the most effective signal, completely overtaking the relevance of board centrality and experience to explain IPO performance. However, these latter board characteristics significantly affected the performance of non-private equity-backed IPOs. Between PE-backed companies, there is a reverse effect of the board centrality on the IPO's performance and a substitution effect of the board's previous experience with IPO processes.

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Section: Hypotheses Developmentmentioning

confidence: 99%

The Tradeoff Between Private Equity Sponsorship, Board Centrality, and Experience as Credible Signals for IPO Performance

et al. 2023

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“…Tal fato pode ser explicado em razão dos efeitos econômicos causados pelo uso do REM serem maiores que o do GRA. Adicionalmente, verifica-se uma média de GRA inferior ao resultado encontrado por Sincerre et al (2019) de 3,8% quando analisaram uma amostra superior (150 empresas) e com maior número de empresas não apoiadas por esses fundos (110), comportamento amostral diferente do obtido neste estudo.…”

Section: Estatística Descritivaunclassified

Influência Do Patrocínio De Fundos De Private Equity E Venture Capital No Gerenciamento De Resultados Em Empresas Que Realizaram Ipo No Brasil

Moura,

Machado

2023

Contab. Vista & Rev.

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O objetivo deste estudo consiste em analisar a influência exercida pela participação de gestores de capital de risco, Private Equity e Venture Capital, no gerenciamento de resultados de empresas brasileiras de capital aberto, no período de 2011 a 2019 (trimestralmente), que fizeram Initial Public Offering (IPO), empregando-se regressão quantílica. Esta investigação foi motivada pela lacuna existente na literatura nacional da relação entre gerenciamento por decisões operacionais reais e as empresas investidas por esses fundos. Para o cálculo do gerenciamento de resultados por accruals foi utilizado o modelo Kothari, Leone e Wasley (2005), enquanto para o cálculo do gerenciamento por decisões operacionais reais foi utilizado o modelo de Roychowdhury (2006). Os resultados demonstraram que as empresas que realizaram IPO no Brasil, patrocinadas por fundos de Private Equity e Venture Capital, apresentaram menor nível de gerenciamento de resultados por atividades operacionais em 3 quantis analisados (baixo, médio e moderado). No entanto, essa relação para o gerenciamento de resultados por accruals discricionários ocorreu apenas nos quantis 0,75 e 0,95, ou seja, moderado e alto. A principal contribuição da pesquisa foi demonstrar a importância de se realizar análise conjunta dos diferentes tipos de gerenciamento de resultados, além de complementar a literatura nacional que não investigou o gerenciamento de resultados por operações reais em IPO de empresas com a participação de gestores de capital de risco.

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“…It provides a financing source dedicated to the stages of creation and post-creation (Rédis, 2009). According to Sincerre et al (2019), VC is addressed to companies that have placed or nearly places its product or service on the market. In addition, it represents an alternative to bank financing that requires guarantees, which are often lacking for young entrepreneurs (Fathonih et al , 2019).…”

Section: Introductionmentioning

confidence: 99%

An alternative model for Islamic venture capital firms

Gafrej

Boujelbène

2022

IMEFM

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Purpose The purpose of this paper is to propose a financial instrument by combining two main contracts in Islamic finance with the aim to minimize risks involved in Islamic venture capital (IVC) activities. Design/methodology/approach A mathematical model and explanatory figures are provided to see how IVC firms can benefit from the combination of “Ijara” contract and “Diminishing Musharaka” contract to provide financing for start-up and high-tech companies. Findings The proposed instrument could be considered as an alternative solution for IVC firms. It represents a low level of risk with a stable income in the beginning of the project. In addition, it allows benefiting from the possible development of start-up and high-tech companies with a smooth exit from the capital of the financed company without the intervention of another investor. It is also considered as a motivational instrument for the entrepreneurs, because it allows benefiting from a grace period on the one hand and from a lower cost of financing compared to other type of funding on the other hand. Practical implications Some studies have concentrated on identifying and understanding the concept, the operation and the challenges of IVC industry. The study is considered among few studies that provide a practical model for IVC firms, which takes account of the different stages of venture capital process. The instrument can promote the development of IVC firms and give alternative financing opportunities to Muslim entrepreneurs. Originality/value The current model provides a truly revolutionary solution for young Muslim entrepreneurs who do not accept to be financed by the proposed instruments of venture capital (VC) firms such as convertible bonds and warrants. On the other side, it provides an alternative solution for IVC firms to the already offered products such as “Musharaka”, “Mudharaba” and “Wakalah” contracts. An expert in “Fiqh Al-Muamalat” (Islamic law of transaction) assessed the Sharia compliance of the model.

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The Impact of Private Equity and Venture Capital Funds on post-IPO Operational and Financial Performance in Brazilian invested companies

Cited by 5 publications

References 24 publications

The Tradeoff Between Private Equity Sponsorship, Board Centrality, and Experience as Credible Signals for IPO Performance

The Tradeoff Between Private Equity Sponsorship, Board Centrality, and Experience as Credible Signals for IPO Performance

Influência Do Patrocínio De Fundos De Private Equity E Venture Capital No Gerenciamento De Resultados Em Empresas Que Realizaram Ipo No Brasil

An alternative model for Islamic venture capital firms

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