ETD Collection

Permanent URI for this collectionhttps://wiredspace.wits.ac.za/handle/10539/104


Please note: Digitised content is made available at the best possible quality range, taking into consideration file size and the condition of the original item. These restrictions may sometimes affect the quality of the final published item. For queries regarding content of ETD collection please contact IR specialists by email : IR specialists or Tel : 011 717 4652 / 1954

Follow the link below for important information about Electronic Theses and Dissertations (ETD)

Library Guide about ETD

Browse

Filters

20171

Settings

Author: search.filters.author.Agyapong, NtiamoahSubject: search.filters.subject.Investments--South Africa

Search Results

Now showing 1 - 1 of 1
  • No Thumbnail Available
    Item
    Determinants of private equity exit strategies in South Africa
    (2017) Agyapong, Ntiamoah
    The 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.