The Global Economic Impact of Private Equity Report 2008 - World ...

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The Global Economic Impact of Private Equity Report 2008 169
AcknowledgementsJosh LernerHarvard Business SchoolAnuradha GurungWorld Economic Forum USAOn behalf of the World Economic Forum and the coreresearch team for the “Global Economic Impact of PrivateEquity” project, we would like to thank the members of theAdvisory Board for their invaluable contributions and feedback.We are indebted to the co-authors Steven J. Davis (Universityof Chicago Graduate School of Business), John Haltiwanger(University of Maryland), Ron Jarmin (US Bureau of theCensus), Õguzhan Karakas (London Business School),Javier Miranda (US Bureau of the Census), Eva Nathusius(Technische Universität München) and Morten Sørensen(University of Chicago Graduate School of Business).Special thanks are due to Franci J. Blassberg and Meir D.Katz at Debevoise Plimpton LLP, who provided legal counsel.Thank you to Kathi Hall and Debra Sheehan, who sub-editedthe Working Papers. We are very grateful to Paula Beardsley,Armelle Vergucht and the team at Wardour and KamalKimaoui and the Publications Team at the World EconomicForum for their valuable assistance in the production of thisvolume of Working Papers. Last, but not least, we thankMark Adams, Rick Samans and Kerry Wellman Jaggi at theWorld Economic Forum for their support.We are thankful to the casewriters Brian DeLacey, KerryHerman and David Kiron at Harvard Business School and thenumerous research associates who provided exemplary helpwith the research, especially Sarah Woolverton of HarvardBusiness School.We would also like to express our gratitude to all the releventindividuals at the following firms and funds for their patienceand willingness to provide information and support for therespective case studies:3i Group plcAllianz SEApax Partners LtdBharti Tele-Ventures LimitedChina Glass Holdings LimitedFreshfields Bruckhaus DeringerGoldman Sachs InternationalHony Capital LimitedICICI VentureLittle Sheep Catering Chain Co.Messer Group GmbHNalanda CapitalNew Look Group LtdPermira Advisers LLPPilkington plcSubhiksha Trading Services LtdWarburg Pincus168 Case studies: AcknowledgementsThe Global Economic Impact of Private Equity Report 2008
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The Globalization of Alternative In
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ContributorsCo-editorsAnuradha Guru
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PrefaceKevin SteinbergChief Operati
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Letter on behalf of the Advisory Bo
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Executive summaryJosh lernerHarvard
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• Private equity-backed companies
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C. Indian casesThe two India cases,
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Part 1Large-sample studiesThe Globa
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The new demography of private equit
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among US publicly traded firms, it
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should be fairly complete. While th
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according to Moody’s (Hamilton et
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draining public markets of firms. I
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FIguresFigure 1A: LBO transactions
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TablesTable 1: Capital IQ 1980s cov
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Table 2: Magnitude and growth of LB
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Table 4: Exits of individual LBO tr
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Table 6: Determinants of exit succe
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Table 7: Ultimate staying power of
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Appendix 1: Imputed enterprise valu
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Private equity and long-run investm
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alternative names associated with t
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4. Finally, we explore whether firm
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When we estimate these regressions,
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cutting back on the number of filin
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Table 1: Summary statisticsPanel D:
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Table 4: Relative citation intensit
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figuresFigure 1: Number of private
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Private equity and employment*steve
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Especially when taken together, our
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centred on the transaction year ide
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and Vartia 1985.) Aggregate employm
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sectors. In Retail Trade, the cumul
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employment-weighted acquisition rat
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FIguresFigure 1: Matches of private
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Figure 6:Figure 6A: Comparison of n
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Figure 8:Figure 8A: Comparison of j
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Figure 11: Variation in impact in e
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Figure 12: Differences in impact on
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Private equity and corporate govern
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et al (2007) track the evolution of
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groups aim to improve firm performa
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distribution of the LBO sponsors, m
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the most difficult cases. This stor
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to see whether these changes of CEO
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Figure 3:This figure represents the
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TablesTable 1: Company size descrip
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Table 5: Changes in the board size,
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Table 7: Board turnoverPanel A: Siz
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Part 2Case studiesThe Global Econom
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European private equity cases: intr
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Exhibit 1: Private equity fund size
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Messer Griesheimann-kristin achleit
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ealized it was not possible to grow
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The deal with Allianz Capital partn
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the deal, the private equity invest
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Exhibit 1: The Messer Griesheim dea
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Exhibit 5: Post buyout structureMes
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New Lookann-kristin achleitnerTechn
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feet. This restricted store space w
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institutional investors why this in
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Although a public listing did not a
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Exhibit 5: Employment development a
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Chinese private equity cases: intro
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Hony Capital and China Glass Holdin
Page 135 and 136: Hony’s Chinese name means ambitio
Page 137 and 138: Establishing early agreement on pos
Page 139 and 140: Executing the IPOEach of the initia
Page 141 and 142: Exhibit 1A: Summary of Hony Capital
Page 143 and 144: Exhibit 4: Members of the China Gla
Page 145 and 146: Exhibit 6A: China Glass post‐acqu
Page 147 and 148: Exhibit 8: China Glass stock price
Page 149 and 150: 3i Group plc and Little Sheep*Lily
Page 151 and 152: y an aggressive franchise strategy,
Page 153 and 154: soul” of the business. But there
Page 155 and 156: Exhibit 1: Summary information on 3
Page 157 and 158: Exhibit 6: An excerpt from the 180-
Page 159 and 160: Indian private equity cases: introd
Page 161 and 162: ICICI Venture and Subhiksha *Lily F
Page 163 and 164: investment,” recalled Deshpande.
Page 165 and 166: 2005 - 2007: Moderator, protector a
Page 167 and 168: Exhibit 3: Subhiksha’s board comp
Page 169 and 170: Warburg Pincus and Bharti Tele‐Ve
Page 171 and 172: founded two companies at this time
Page 173 and 174: By 2003 this restructuring task was
Page 175 and 176: Exhibit 1C: Private equity investme
Page 177 and 178: Exhibit 4B: Bharti cellular footpri
Page 179 and 180: Exhibit 6: Summary of Bharti’s fi
Page 181 and 182: Exhibit 7: Bharti’s board structu
Page 183 and 184: In the 1993‐94 academic year, he
Page 185: consumer products. She was also a R
Page 189: The World Economic Forum is an inde
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