Investorreporting und Managementbeitrag bei Private Equity Funds und aktivistischen Hedge Funds am deutschen Markt

Wenzl, Johann Wolfgang
October 2010
University of St. Gallen, Business Dissertations;10/26/2010, p1
The determination of appropriate levels of transparency and the ability to generate added value due to the active management of the portfolio companies are subject to controversial ongoing discussions regarding Private Equity Funds (PE) and activist Hedge Funds (HF). Both topics are linked, since the investors of PE and HF seek reliable information in order to make an informed investment decision based on future return expectations. In addition, the remaining stakeholders of the portfolio companies and the investing public demand transparency in order to evaluate the actions and measures taken by PE and HF. Reflecting this, the work is divided into two parts. In part one, a three layer assessment model is established in order to facilitate the selection of appropriate transparency levels by fund management and investors. The first layer of the model categorizes the observed active investment strategies of PE and HF. The major criteria applied are the stake size in the portfolio company, the use of leverage at portfolio level or fund level, and the use of short selling. The second layer identifies the regulated fund models and their reporting requirements. Since the use of regulated fund models is not compulsory in Germany, these models illustrate the lawmaker's basic reporting requirements of PE and HF. The third layer takes into account the various reporting and valuation guidelines of the business sector associations of PE and HF aimed at improving transparency for investors by means of a consistent reporting process. The analysis shows that PE guidelines focus primarily on valuation issues and a fair presentation, whereas HF guidelines aim to avoid conflict of interests between fund management and investors. The second part of the work analyses the value added created by PE and HF due to the active management of portfolio companies. The major focus of the analysis is the recent financial crisis and its impact on the value of the portfolio companies. The analysis is based on a unique data set of 192 investments of PE and 258 investments of HF in public listed companies in Germany during Mai 2008 until March 2009. In order to create an integrated assessment model, the analysis follows the categories defined in part one. Based on this, substantial differences in the selection and investment criteria of PE and HF can be identified. Although both types of funds fail to obtain long term abnormal buy and hold returns based on the share price development of the portfolio companies.


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