Consistent with Jensen’s [1] predictions, the buyout market has grown tremendously since the 1980s. Buyout transactions, for example, account for more than one half of all private equity (PE) investments, estimated to be worth about $2.5 trillion worldwide [2]. The US, Asian and European buyouts exhibit many similar features. This is explained by dominance of internationally transmitted financial technology over institutional and business cultural factors [3]. Globally, the US market still receives the highest amount of PE investments followed by the UK market. The unprecedented growth of UK PE backed buyouts generated public interest and, at the same time, created some controversy regarding buyouts and the role of PE investors. For example, media and some politicians often accuse PE firms of shorttermism (i.e. exiting too early) and lacking to improve the buyouts’ performance. The PE industry (e.g. British Private Equity and Venture Capital Association - BVCA), on the other hand, argues that PE firms work longer with their targets and that companies backed by PE have performed better than other companies. In this editorial article, we summarise recent literature that examines longevity of UK buyouts thus shedding more light on the above controversy. We also discuss limitations of the previous research and suggest some interesting areas for future research.
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