VALUE CREATION IN NORTH-EAST ITALIAN PRIVATE-EQUITY-BACKED FAMILY FIRMS A CASE STUDY ANALYSIS USING THE INSEAD VALUE CREATION FRAMEWORK

Abstract

The objective of this thesis is to investigate the impact of private equity (PE) ownership on family businesses in north-eastern Italy and their performance using a mixed-method approach with both qualitative and quantitative analysis, investigating whether and how a private equity transaction could benefit a family business. Family firms are strongly characterised by a strong emotional attachment and a long-term perspective, while private equity firms focus urgently on financial performance and value creation. The quantitative analysis carried out on a single, independently constructed sample, analyses the performance of five balance sheet variables from years before the acquisition to years after the exit. The qualitative analysis, based on case studies and interviews with the main protagonists of three transactions, confirms the hypothesis that private equity firms contribute to former family businesses in those areas where family businesses are typically challenged. Overall, the thesis concludes that private equity fund ownership has a positive impact on former family businesses and their performance, which is driven by contributions from private equity funds in areas where family businesses are typically challenged. The impact on the performance of former family businesses is supported by the division of value creation into different resources, through a model developed by INSEAD.