The Master Thesis Award 2020 goes to...
Martin Warin & Jakob Kalbe for their joint thesis: "Dressed for Long-Term Success - Evidence from Sweden Regarding the Long-Term Value Creation of Private Equity Sponsors".
Warm congratulations from the Swedish House of Finance to Martin Warin & Jakob Kalbe for winning this years Master Thesis Award!
The prize is awarded annually, this year for the second time, in order to stimulate students to work on topics related to financial economics by using data on Nordic financial markets availaible at the Swedish House of Finance Data Center.
Martin Warin and Jakob Kalbe have both gratuated from the Master in Finance program at the Stockholm School of Economics.
In their thesis, Martin and Jakob analyze the long-term changes in companies after leverage buyouts (LBOs) by PE funds. They follow those firms over multiple years and then study the performance on the stock market after the PE funds exit via an IPO. One of the many strengths of the thesis is the substantial data collection effort from the Serrano database. The authors establish that PE firms implement significant changes in the companies they buy --- for example, they increase the productivity of the workforce and the overall profitability --- and that those changes are valued by investors once those firms are listed again on public stock exchanges. Thus, the thesis presents empirical evidence that suggests that PE funds have a significant, value-increasing impact on their holding companies in the long run. This is an important and interesting topic; in particular, for Sweden with its sizeable PE and buyout industry. Overall, the thesis represents a great effort and produces results that represent contributions to the existing literature and have important implications for industry.