e-journal

Private equity coming out of the dark The motivations behind private equity activity in Australia

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Purpose – The purpose of this exploratory study is to gain a better understanding of the motivations
behind private equity (PE) activities in Australia.
Design/methodology/approach – This paper reports findings arising from face-to-face
semi-structured interviews with individuals representing stakeholders in the market for private
equity; namely, PE partners and finance professionals. Interviews were conducted in two stages,
during the pre-Global Financial Crisis (GFC) period (2007-2008) and the post-GFC period (2012).
Findings – In general, the stakeholders interviewed perceive that the motivations behind PE bids are
not well understood, and they highlight the need for more education. They state that PE enables a
company’s management to make decisions more promptly; capture opportunities more effectively;
reduce paperwork for executives; provide no accountability to a broad investor base; and most
importantly create value for a business, as the ownership is more closely involved with the
management in the day-to-day operations of the business. According to the interviewees, since the
GFC, PE firm reputation and track record are considered to be even more crucial than before the GFC,
as debt providers in particular have become more wary when lending.
Originality/value – The findings have implications for the agency relationship model. The principals’
role might appear to be more tightly aligned with that of the agent, and so are their motivations, thus
reducing monitoring costs, but post-GFC interview responses indicate that this might not necessarily be
the case. Concerns over empire building and gains through transaction costs were raised. The paper
concludes by drawing from the insights gained by the authors from the interview data. Although it is
only a small part of the economy’s Gross Domestic Product, PE activity has helped Australia become a
more competitive business economy.

Keywords Accounting, Disclosure, Private equity, Australia

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Informasi Detail

Judul Seri

Qualitative Research in Accounting & Management

No. Panggil

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Penerbit

: Emerald Group., 2013

Deskripsi Fisik

Qualitative Research in Accounting & Management Vol. 10 No. 2, 2013 pp. 172-191

Bahasa

English

ISBN/ISSN

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Klasifikasi

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Tipe Isi

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Tipe Media

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Tipe Pembawa

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Edisi

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Subjek

AKUNTANSI

Info Detail Spesifik

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Pernyataan Tanggungjawab

Asmawati/Syahrial

Versi lain/terkait

Lampiran Berkas

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