Winning a Deal in Private Equity: Do Educational Networks Matter?

Item Type	Forthcoming
Abstract	In this paper, we investigate the role of educational ties in private equity. Although we cannot observe all the funds that bid for a target company, we construct the set of potential bidders based upon their size and investment cycle, as well as the location and sector of their target companies. By gathering detailed educational histories of fund partners and CEOs of target firms, we find a significantly higher incidence of educational ties in completed deals than exists among the set of potential bidders. We argue that educational ties between fund managers and CEOs of target companies play a (positive) role in sourcing deals and winning competitive transactions. The alma maters of CEOs and private equity partners are notably concentrated among the top universities, and we find that exclusivity of educational ties is important. However, we find no evidence that such educational ties produce higher returns for investors.
Authors	Füss, Roland; Fuchs, Florian; Jenkinson, Tim & Morkötter, Stefan
Journal or Publication Title	Journal of Corporate Finance
Language	English
Keywords	Buyout, Deal sourcing, Performance, Educational ties, Investment choice
Subjects	business studies economics finance
HSG Classification	contribution to scientific community
HSG Profile Area	SOF - System-wide Risk in the Financial System
Refereed	Yes
Date	14 September 2020
Publisher	Elsevier
Series Name	School of Finance Working Paper Series
Number of Pages	18
ISSN	0929-1199
Publisher DOI	https://doi.org/10.1016/j.jcorpfin.2020.101740
Official URL	https://www.sciencedirect.com/science/article/pii/...
Contact Email Address	roland.fuess@unisg.ch
Depositing User	Beatrix Kobelt-Glock
Date Deposited	29 Aug 2017 11:19
Last Modified	16 Sep 2022 00:29
URI:	https://www.alexandria.unisg.ch/publications/251485

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Füss, Roland; Fuchs, Florian; Jenkinson, Tim & Morkötter, Stefan (2020) Winning a Deal in Private Equity: Do Educational Networks Matter? Journal of Corporate Finance, ISSN 0929-1199

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https://www.alexandria.unisg.ch/id/eprint/251485

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