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Title:Private Equity und Familienunternehmen: eine Untersuchung unter besonderer Berücksichtigung deutscher Maschinen- und Anlagenbauunternehmen PDF Logo
Authors:Schalast, Christoph
Barten, Benita
Issue Date:2008
Series/Report no.:Working paper series // Frankfurt School of Finance & Management 107
Abstract:Despite the common view that there is inherently a relationship of confliction, it is now impossible to imagine the financing of family-owned enterprises in Germany without the alternative method of Private Equity financing. Based on a survey on Private Equity in family owned companies specialising in the mechanical engineering sector, this working paper identifies that Private Equity in general is not as unwanted as once assumed. Overall more than 3/4 of the surveyed companies do not exclude investment capital. However, the study demonstrates that the time of large buy-outs is arguably up, and minority capital has now come into vogue. This working paper examines, from the viewpoint of the managing directors of the studied companies, the conceptions and beliefs held by such persons about Private Equity. Generally speaking, besides loss of control, managing directors primarily fear Private Equity because of exaggerated returns on investment at the expense of the long-term development of the company. On the other hand, this paper also highlights that managing directors expect that Private Equity can have a positive element as it can enable bank independence, especially at a time when it becomes increasingly difficult to maintain creditworthiness. Further, this paper analyses the relationship between the managing director of the family enterprise and the Private Equity investor. Because of the special situation of the managing director in a family owned company, trust between that person and the Private Equity investor is one of the most important factors. If there is a lack of trust the business relation is troubled from the start.
Subjects:Private equity
buyout
family owned enterprises
minority capital
credit crisis
MBO
MBI
return on investments
LBO
leveraged finance
M&A
JEL:K12
K19
K22
K29
Persistent Identifier of the first edition:urn:nbn:de:101:1-2009010822
Document Type:Working Paper
Appears in Collections:Frankfurt School - Working Paper Series, Frankfurt School of Finance and Management

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