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CFC member Dmitry Kokorev presented the report “Portfolio Firms Performance: Do Private Equity Funds Matter on Emerging Markets?” at the Research Workshop of the HSE Finance Department


Dmitry Kokorev, member of the Corporate Finance Center, presented the report “Portfolio Firms Performance: Do Private Equity Funds Matter on Emerging Markets?”  at the regular Research Workshop of the HSE Finance Department 'Empirical Corporate Finance' on November 30th, 2015. 
Presenter :
Dmitry Kokorev, Research Assistant of the Corporate Finance Laboratory, Head of Global Markets Department Analytics Division, Sberbank CIB
Opponent :
Stepanov Sergey, PhD: Université libre de Bruxelles, Associate Professor at the Department of Finance of the Faculty of Economics

ABSTRACT: 
Private equity funds are relatively new and yet not thoroughly examined financial market participants. Research papers on private equity that appeared during the last thirty years are mostly focused on the peculiarities of the funds’ functioning and their impact on the portfolio companies and, consequently, on the real sector of the economy. These papers however are concentrated on the U.S., UK and other developed markets, whereas the studies analyzing the impact of private equity on the effectiveness of the portfolio firms in emerging markets are still rare.
Our pilot case-based study, panel data analysis and DEA (Data Envelopment Analysis) aim at testing a set of hypotheses on comparative performance of Russian portfolio companies and peers. We also try to estimate the influence of a company’s industry and controlling interest in a company by PE fund on efficiency of the portfolio company.
The results of the panel data analysis show that that private equity funds lead to higher performance of portfolio firms than the performance of peer firms. The presence of foreign investors in a fund, as well as the acquisition of a majority stake, has a positive effect on the efficiency of the investee company. The preliminary results of our pilot research allow us to formulate policy implications for the development of private equity industry for the emerging markets.