The Strategic Roles and Functions of Private Equity Funds in Cooperation and Collaboration with Enterprises Seeking for Transformation
|Keywords:||私募股權基金;企業併購;轉型;策略;價值創造;Private Equity;Merger & Acquisition;Transformation;Strategy;Value Creation|
Experienced dynamic growth for decades, enterprises in Taiwan are now facing stagnation due to challenges to their original advantage of competitiveness such as cost saving strategy of utilizing low cost labor, well-developed industrial clusters and supply chains, and forward-looking involvement in technology sector. However, opportunities come along with changes, which are inclusive of industrial evolution given rise to technology moving forward, shift of demographic structure and global economic growth engine. Private equity funds are with the nature and business model to reduce agency costs. They buy enterprise, help fix it and sell it. Moreover, they create value through improving targeted enterprises’ strategies and operating efficiency, cooperating with management team and leveraging financial engineering. There are a number of studies proving their value creation functions and outperformance. Therefore, private equity funds appear to be well positioned to assist in enterprise transformation. My thesis identifies eight cooperation and collaboration models between enterprises and private equity funds in terms of enterprise transformation and the respective strategic roles and functions of private equity funds in these models. They are minority investment, leverage buyout, management buyout, buy-and-build, business alliance, extension of value chain, acquisition of advanced technology, and acquisition of strategic entities for developing a nation’s focused industries. The former three models are traditional cooperation types for enterprises and private equities, and the later four models are observed in emerging economy and with a group of joint investors including strategic investors and private equity funds. This study identified that apart from financial investors, private equity funds are also industry and management advisors, enhancing operation efficiency, connecting talents, M&A advisors and deal makers.
|Appears in Collections:||Thesis|