Are private equity investors good or evil?p

The paper investigates the motives of activity (entry and exit) of private equity investors in European companies. Investment of a PE firm is not viewed unambiguously. First, it is claimed that PE investment is made for the sake of seeking short-term gains by taking control and utilising the company’s resources. Second, PE firm invests because of prior identification of chances to add value to the company. We attempt to resolve these two conflicting conjectures, write Oleg Badunenko, Nataliya Barasinska and Dorothea Schäfer for DIW Berlin – the German Institute for Economic Research.