Private Equity Ownership and Value Based Management practices: the role of partners

Purpose – The purpose of the paper is to investigate how PE firms diffuse managerial mechanisms to manage the economic value in unlisted companies. We respond to the call for more diffusion-theoretic work that investigates why VBM management practices vary across companies, analyzing how PE ownership and its general partner characteristics affect the VBM multidimensional construct. Design/methodology/approach – Adopting a multiple case study approach, we develop our research analyzing nine PE firms. Findings – The results of our analysis provide interesting findings on how VBM activities are employed by PE firms in unlisted firms, as well as valuable insights on the influence of general partners characteristics affect these managerial mechanisms. Originality/value – The paper provides both theoretical considerations and practical contributions to the topic of VBM diffusion. First, the research sheds light on VBM activities employed by PE to manage the economic value in unlisted firms. Second, it highlights the stimulus of general partners in spreading VBM multidimensional construct.