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Karsai, Judit
Year of Publication: 
Series/Report no.: 
IEHAS Discussion Papers MT-DP - 2009/20
Abstract (Translated): 
The actors of economy and politics all over the world have long debated about the effect private equity investments make on economy. The debate focuses on the effect of a narrow group of private equity investments, namely, Leveraged Buyouts (LBO), while nobody questions the positive impact of venture capital investments in the early phase of the development of companies. Amidst the crisis, the question raised has a particular edge to it: is private equity indeed such an ownership model that is able to induce the permanent improvement of the companies purchased, or is it only simple financial engineering, which takes advantage of the tax allowances and merely rearranges incomes. All in all, research did not confirm that private equity investors cash in on huge yields through ripping off the portfolio companies. Nor do they prove that the buyouts have a negative effect on the growth or competitiveness of the sectors concerned, or that they would make the financial and economic systems unstable.
Venture Capital
Private Equity
Merger & Acquisition
Corporate Restructuring
Corporate Governance
Document Type: 
Working Paper

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