scholarly journals Uncertainty Resolution Under Extreme Information Asymmetry: The Case Of Alberta's Private Equity Markets

2011 ◽  
Vol 4 (1) ◽  
Author(s):  
Michael J. Robinson ◽  
Thomas J. Cottrell
Keyword(s):  
Information Asymmetry ◽  
Significant Role ◽  
Private Equity ◽  
Equity Markets ◽  
Equity Market ◽  
Equity Capital ◽  
Securities Regulation ◽  
Venture Capitalists ◽  
Uncertainty Resolution

This study develops and tests a model of how private equity market investors mitigate risk. We find evidence that changes in securities regulation increase the pool of private equity capital. We also identify a previously overlooked category of private equity investors that are neither angels nor venture capitalists and demonstrate that they play a significant role in this market.

Performance of VC/PE-backed IPOs: New Insights from India

2020 ◽  
pp. 097215092095054
Author(s):  
Soumya G. Deb ◽  
Pradip Banerjee
Keyword(s):  
Initial Public Offerings ◽  
Private Equity ◽  
Operating Performance ◽  
Equity Market ◽  
Venture Capitalists ◽  
Public Offerings ◽  
Market Perception ◽  
Using Data

This article explores long-term equity and operating performance of Indian firms issuing initial public offerings (IPOs) backed by venture capital/private equity (VC/PE) funding. Using data for 173 IPOs backed by VC/PE funding during 2000–2016, the article shows that equity market performance of VC/PE-backed IPOs is unimpressive post issue, compared to their peers. This is not only due to market perception but also associated with a declining operating performance. However, information asymmetry, mispricing and ‘timing the market’ by issuing firms do not seem to be the reasons for such long-term underperformance. We argue that it may be a case of too much money chasing too few winners for Indian IPOs and individual rent-seeking activities by managers. The observation raises the question of effectiveness of the monitoring role of venture capitalists or PE funders post the IPO in an Indian context. This is substantiated by our additional finding that sustained monitoring and hand-holding by venture capitalists and PE funders post the IPO cause an improvement in performance. The findings of this study can have significant implications for all stakeholders, particularly common investors in the Indian equity market.

Improving Transparency in the Private Equity Market

CFA Magazine ◽  
2011 ◽  
Vol 22 (3) ◽  
pp. 10-10
Author(s):  
Osman Ghani
Keyword(s):  
Private Equity ◽  
Equity Market

scholarly journals Information Asymmetry, Ownership Structure and Cost of Equity Capital: The Formation for Open Innovation

2021 ◽  
Vol 7 (1) ◽  
pp. 48
Author(s):  
Ade Imam Muslim ◽  
Doddy Setiawan
Keyword(s):  
Stock Market ◽  
Information Asymmetry ◽  
Ownership Structure ◽  
Trading Volume ◽  
Foreign Ownership ◽  
Equity Capital ◽  
Cost Of Equity Capital ◽  
Cost Of Equity ◽  
Ownership Structures ◽  
The Cost

Our study aims to investigate how information asymmetry and ownership structure affect cost of equity capital. For that purpose, we collected 246 issuers over 4 years for a total of 984 observations. By using panel data processing, we found that the information asymmetry we proxied through Price non-Synchronization and trading volume had an effect on the cost of equity capital. Our results also confirmed both Agency Theory and Pecking Order Theory. Both theories are in line with the conditions of the stock market in Indonesia. In addition, we found that institutional and foreign ownership structures also had an effect on the cost of equity capital. Furthermore, our results also confirmed Interest Alignment Theory and Entrenchment Theory. Our research is expected to contribute to the debate on the existence of information asymmetry and ownership structures in relation to the cost of equity capital. We also hope that it will be a valuable input for investors in considering their investment. Moreover, from the results of this study, investors can also consider foreign ownership or institutional ownership in determining their investment. In addition, stock market regulators in Indonesia can develop approaches to minimize information asymmetry and encourage foreign investors to invest in Indonesia.

The study of mixed assets allocation based on Black–Litterman model

2021 ◽  
pp. 2150022
Author(s):  
Jianwu Lin ◽  
Mengwei Tang ◽  
Jiachang Wang ◽  
Ping He
Keyword(s):  
Stock Market ◽  
Asset Allocation ◽  
Private Equity ◽  
Equity Market ◽  
Research Topic ◽  
Allocation Model ◽  
Quantitative Models ◽  
Challenging Research ◽  
Qualitative Models ◽  
New Type

With Private Funds having a new type of license for asset allocation practice in China, comprehensive asset allocation cross private equity and stock market has received more attention. However, most of the studies focus more on the stock market, and asset allocation models for private equity market that are mainly made based on experience. Thus, the joint allocation of assets crosses both markets making it a challenging research topic. This paper introduces the Black–Litterman model into the private equity market, realizing the transition from qualitative models to quantitative models. It lays a solid quantitative ground for the mixed asset allocation model in both the markets.

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