Value Creation in Private Equity Funds through LBOs. A Silver-Lake Case Study on Dell Technologies
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suque-arturo-wakim-edmond-ib-cems-master-thesis-2019-2020.pdf (3,943Mb) (Accés restringit)
Estadístiques de LA Referencia / Recolecta
Inclou dades d'ús des de 2022
Cita com:
hdl:2117/333567
Realitzat a/ambHEC Paris
Tipus de documentProjecte Final de Màster Oficial
Data2020-07-09
Condicions d'accésAccés restringit per decisió de l'autor
Tots els drets reservats. Aquesta obra està protegida pels drets de propietat intel·lectual i
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Abstract
Private equity has emerged as the alternative investment form throughout the recent past and saw a great degree of development through its emergence in the 1970s, its rise in the 1980s and its manifestation in the 1990s until today. Broken down, private equity funds enter a company and enhance its value
throughout the holding period until conducting an exit. Value creation is achieved in numerous ways and is primarily focused on operational enhancements, the use of financial engineering and the final means of exiting the company in order to realize returns. The results of the literature review of this thesis reveal that operational improvements pose the largest share of value creation within private equity held portfolio companies. Particularly revenue increasing methods and the improvement of profitability have been found to be pivotal in the success of a financial sponsor’s involvement in a company. The traditional approach of financial engineering, mainly with the use of leverage, also shows significant results. However, simply levering a company will not yield the desired results and the former hope of financial sponsors to generate returns using multiple expansion has been shown to not be something PEs can act upon much. Exit strategies are crucial in order to realize the carefully improved company. This study illustrates what these strategies look like in practice by means of a case study on the LBO of Dell Inc. in July 2013, by Silver Lake Partners and Michael Dell. Our analysis showcases how Silver Lake successfully implemented most of the value creation levers identified in the literature, and through our hypothetical 2018 exit scenario was thus able to generate an IRR of 43.9% and return nearly 4.5x its original investment to its investors.
TitulacióMÀSTER UNIVERSITARI EN ENGINYERIA INDUSTRIAL (Pla 2014)
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