ABSTRACT

Despite the economic significance of private equity (PE) firms, there has been limited investigation into the control mechanisms they implement to manage relationships with their portfolio companies. Through a comparative field study, we describe the role and characteristics of controls implemented by PE firms and the contextual factors associated with the relative importance of different control mechanisms. Evidence shows that control mechanisms play an important role in directing the actions of portfolio companies and that there is significant variation between PE firms in terms of the combination of formal contracting, results, behavior, and social controls that are relied upon. We find that the primary factors associated with the choice of control combination are the equity arrangement and the perceived cognitive style of top management in the portfolio company. From our analysis, we derive a framework of four control combinations that are aligned to variations in these two factors. Our analysis also points to the potential interdependencies that arise between control mechanisms within each control combination.

摘要

尽管私募股权 (PE) 公司具有经济意义，但对其为管理与投资组合公司的关系而实施的控制机制的调查却很有限。通过比较实地研究，我们描述了私募股权公司实施的控制的作用和特征，以及与不同控制机制的相对重要性相关的背景因素。证据表明，控制机制在指导投资组合公司的行动方面发挥着重要作用，并且在正式合同、结果、行为和所依赖的社会控制的组合方面，私募股权公司之间存在显着差异。我们发现，与控制组合选择相关的主要因素是股权安排和被投资公司高层管理人员的认知风格。从我们的分析中，我们得出了与这两个因素的变化相一致的四种控制组合的框架。我们的分析还指出了每个控制组合内的控制机制之间存在的潜在相互依赖性。