The Effects of Prıvate Equıty on the Fınancıal Performance of Fırms

Abstract

The research Private equity investing has risen to prominence in the modern business world. The purpose of the study is to determine whether private equity influences the financial performance of a company. This study uses a quantitative approach to attain its primary purpose. In order to determine the effect of private equity on the financial performance of a company, this study uses data from the Thomson Reuters database for the years 2012 to 2020 . There are 54 companies in the database that are supported by private equity. The study is limited since Thomson Reuters lacks financial data for the remaining companies. For the purpose of determining the effects of private equity on firm financial performance, the panel regression of the pooled OLS and random model is employed. return on investment of private equity funds as the dependent variable. The study covered independent factors such as private equity fund size, stakes, number of transactions, and capital invested. In the investment industry, these characteristics are essential for explaining private equity. According to the findings of our study, several the explanatory variables have a statistically significant impact on the firm's financial performance. This shows that the private equity fund has a positive effect on the firm's financial success, while the other independent factors have no effect on the return on private equity.