We examine whether risk, timing or mispricing hypotheses can explain the underperformance of private and public equity issuers, in Canada, where both categories share several common characteristics. Adding an investment risk factor to the TFPM reduces, but does not eliminate, the...

In Canada, most of the private placements are offered by small and unprofitable entrepreneurial ventures -- for which the asymmetry of information and adverse selection problems are particularly acute. Private placements are a very important source of equity for these emerging businesses. In...

We examine the long-run performance following traditional private placements by Canadian public firms, to provide an explanation for the common observation that such placements are generally followed by abnormally low returns. We investigate 3,291 Canadian private investments in public equity...