Shaking hands with common foes: Clique premium and information diffusion in private equity networks

Giovannetti, A; Pipic, D

Shaking hands with common foes: Clique premium and information diffusion in private equity networks

Giovannetti, A Pipic, D

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Publisher:: Elsevier
Publication Type:: Journal Article
Citation:: International Review of Financial Analysis, 2023, 86, pp. 102527
Issue Date:: 2023-03

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Field	Value	Language
dc.contributor.author	Giovannetti, A
dc.contributor.author	Pipic, D
dc.date.accessioned	2024-05-27T20:44:43Z
dc.date.available	2024-05-27T20:44:43Z
dc.date.issued	2023-03
dc.identifier.citation	International Review of Financial Analysis, 2023, 86, pp. 102527
dc.identifier.issn	1057-5219
dc.identifier.uri	http://hdl.handle.net/10453/179252
dc.description.abstract	The fastest growing segment of private equity deals is secondary buyouts SBOs sales from one private equity PE firm to another We operationalize a novel FactSet database to map the network structures of secondary buyouts between PE firms We offer three contributions First after controlling for economic covariates we find that PE firms are almost three times more likely to transact if they share a partner that is both firms belong to the same clique Second we find that the profitability of such transactions is unambiguously higher relative to the baseline only if these are the result of repeated interaction between firms belonging to the same cliques In other words a clique premium exists under repeated interaction Third we provide evidence that the economic incentive at the core of clique premium may be related to access to information In fact we show that information related to transactions diffuses through the network with 23 and 16 of the information going one and two steps beyond transacting parties respectively
dc.language	en
dc.publisher	Elsevier
dc.relation	http://purl.org/au-research/grants/arc/DP170100429
dc.relation.ispartof	International Review of Financial Analysis
dc.relation.isbasedon	10.1016/j.irfa.2023.102527
dc.rights	info:eu-repo/semantics/openAccess
dc.subject	1501 Accounting, Auditing and Accountability, 1502 Banking, Finance and Investment, 1801 Law
dc.subject.classification	Finance
dc.subject.classification	3501 Accounting, auditing and accountability
dc.subject.classification	3502 Banking, finance and investment
dc.subject.classification	3801 Applied economics
dc.title	Shaking hands with common foes: Clique premium and information diffusion in private equity networks
dc.type	Journal Article
utslib.citation.volume	86
utslib.for	1501 Accounting, Auditing and Accountability
utslib.for	1502 Banking, Finance and Investment
utslib.for	1801 Law
pubs.organisational-group	University of Technology Sydney
utslib.copyright.status	open_access	*
pubs.consider-herdc	true
dc.date.updated	2024-05-27T20:44:42Z
pubs.publication-status	Published
pubs.volume	86

Abstract:

The fastest growing segment of private equity deals is secondary buyouts SBOs sales from one private equity PE firm to another We operationalize a novel FactSet database to map the network structures of secondary buyouts between PE firms We offer three contributions First after controlling for economic covariates we find that PE firms are almost three times more likely to transact if they share a partner that is both firms belong to the same clique Second we find that the profitability of such transactions is unambiguously higher relative to the baseline only if these are the result of repeated interaction between firms belonging to the same cliques In other words a clique premium exists under repeated interaction Third we provide evidence that the economic incentive at the core of clique premium may be related to access to information In fact we show that information related to transactions diffuses through the network with 23 and 16 of the information going one and two steps beyond transacting parties respectively

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http://hdl.handle.net/10453/179252