Determinants of private equity exit strategies in South Africa

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dc.contributor.authorAgyapong, Ntiamoah
dc.date.accessioned2017-09-12T13:31:50Z
dc.date.available2017-09-12T13:31:50Z
dc.date.issued2017
dc.descriptionThesis submitted in fulfilment of the requirements for the degree of Master of Management in Finance & Investment in the Faculty of Commerce Law and Management Wits Business School at the University of the Witwatersranden_ZA
dc.description.abstractThe objective of this paper is to study the exit behaviour of private equity investments held by independent private equity firms in South Africa. As this is an exploratory study we examine empirical hypotheses previously tested by other authors. Firstly, we test whether portfolio companies within high technology sectors are more likely to achieve an initial public offering (IPO) exit relative to other exits. Secondly, we test the effect of the lending rate on the likelihood of a secondary sale. Lastly, we consider the relative preference of IPO compared to acquisition (M&A) and other exit modes. As South Africa is considered to be a bank-centered financial system (Levine, 2002), private equity investments within the market would be expected to experience poor IPO activity as suggested by the literature (Black and Gilson, 1998).The research is quantitative in nature and involves the use of statistical modelling, multinomial logistic regression was applied, using panel data, which assumes that the effect of explanatory variables on the choice of exit varies across observations (private equity firms) and over time. From the multinomial logit model it was found that; 1) High technology firms were more likely to be exited by means of M&A rather than IPO; 2) An increase in the lending rate was found to increase the likelihood of a Secondary sale which is contrary to previous research (Sousa, 2010); and 3) M&A was found to be the most likely mode of exit assuming all explanatory variables were at their mean, while IPO was the least likely mode of exit.en_ZA
dc.description.librarianMT2017en_ZA
dc.format.extentOnline resource (ix, 60 leaves)
dc.identifier.citationAgyapong, Ntiamoah (2017) Determinants of private equity exit strategies in South Africa, University of the Witwatersrand, Johannesburg, <http://hdl.handle.net/10539/23080>
dc.identifier.urihttp://hdl.handle.net/10539/23080
dc.language.isoenen_ZA
dc.subject.lcshCorporate divestiture--South Africa
dc.subject.lcshConsolidation and merger of corporations--South Africa
dc.subject.lcshInvestments--South Africa
dc.subject.lcshStocks--Prices--South Africa
dc.titleDeterminants of private equity exit strategies in South Africaen_ZA
dc.typeThesisen_ZA
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