Analysing the criteria of private equity investment in South Africa
Journal of Economic and Financial Sciences
| Field | Value | |
| Title | Analysing the criteria of private equity investment in South Africa | |
| Creator | Hamman, Albertus Nel, Ines Oberholzer, Merwe | |
| Description | Orientation: Within the conceptual paradigm that the institutional environment may influence investment criteria, this study argues that South Africa has a unique socio-economic environment and matters such as black economic empowerment, corruption, redistribution of land and other related matters pose unique challenges to private equity investors.Research purpose: The purpose was to determine the critical criteria that present a challenge to private equity investment professionals when considering an investment in business ventures in South Africa.Motivation for the study: As far as can be established, similar research to identify and prioritise the investment criteria used by private equity investors has not been done or published in South Africa.Research approach/design and method: A literature review was conducted to develop qualitatively a 51-component questionnaire, which was quantitatively tested by a convenience sample of 44 registered private equity investment professionals in South Africa.Main findings: Descriptive statistical analysis revealed that the most important individual criteria component is the intention of co-shareholders. From a factor analysis, the most important factors are the internal and the external abilities of the fund manager to identify investment opportunities.Practical/managerial implications: The new prioritised investment decision-making criteria may aid potential target companies, wanting to attract funding from private equity investors, to organise themselves to become attractive investment opportunities.Contribution/value-add: A new prioritised list was developed to better understand how South African private equity investment professionals make investment decisions. | |
| Publisher | AOSIS | |
| Date | 2021-04-26 | |
| Identifier | 10.4102/jef.v14i1.608 | |
| Source | Journal of Economic and Financial Sciences; Vol 14, No 1 (2021); 15 pages 2312-2803 1995-7076 | |
| Language | eng | |
| Relation |
The following web links (URLs) may trigger a file download or direct you to an alternative webpage to gain access to a publication file format of the published article:
https://jefjournal.org.za/index.php/jef/article/view/608/1215
https://jefjournal.org.za/index.php/jef/article/view/608/1213
https://jefjournal.org.za/index.php/jef/article/view/608/1214
https://jefjournal.org.za/index.php/jef/article/view/608/1212
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