Governance of private equity investment in India : a qualitative approach
by Vikas Uberoi
Private equity firm is a generic expression for an investment intermediary that makes investments in private companies. Funds may be provided from a wide range of sources including pension funds, financial institutions and other institutional investors, companies, public bodies and high net worth individuals. Many private equity firms, as engines of economic growth and innovation, operate globally and typically most of them follow a simple operative cycle: Raise Funds → Make Investments → Manage Investments → Harvest Investments → Return funds and share profits → Raise Funds. The subject of this dissertation was focused on managing the investments as it determines the harvest value, returns on investment, the ability of a fund manager to raise additional capital, and ability to strongly compete for the candidate investee company, especially in India. Therefore, the basic question raised was: How does a successful private equity firm add value to its portfolio company in an emerging economy like India? A qualitative empirical approach was used to answer the question raised in this dissertations. Based on extensive interviews with five private equity directors and survey responses from 12 companies, the role of private equity firm in governance of portfolio company investment, via a director was determined as: an unbounded function of the investor, via the director, to be prepared to empower the entrepreneurs and company executives to strategically grow the business. In this context, "unbounded" refers to the fact that once the investment is made all types of activities are within the scope of the directors and investment teams. These could include all types of relevant analysis, exploring growth opportunities, proposing and developing collaborative strategies, mediating conflicts, and guiding the entrepreneurs. The term "unbounded" also considers the fact that different directors and teams have different skills and motivations, which would determine the results of the governance during the holding period. It also implies that the activities of the private equity directors and investment teams may work with or without a formal board. The term "prepared" implies that the private equity directors and investment teams are willing to go much beyond their regular monitoring role to influence the executives when the situation calls for it. The theoretical framework of creativity of action, actor-network, and conventions, explained the empirical results and how the subject investors influenced the value of the portfolio companies. The framework also provides richness to the definition of investment manager's governance function.
Year of publication: |
2014
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Authors: | Uberoi, Vikas |
Publisher: |
St. Gallen : Univ. |
Subject: | Private Equity | Private equity | Corporate Governance | Corporate governance | Indien | India |
Saved in:
freely available
Extent: | Online-Ressource (126 S.) graph. Darst., Kt. |
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Type of publication: | Book / Working Paper |
Type of publication (narrower categories): | Hochschulschrift ; Thesis ; Graue Literatur ; Non-commercial literature |
Language: | English |
Thesis: | St. Gallen, Univ., Diss., 2013 |
Notes: | Zsfassung in dt. Sprache Systemvoraussetzungen: Acrobat Reader |
Source: | ECONIS - Online Catalogue of the ZBW |
Persistent link: https://www.econbiz.de/10010253787
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