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Private equity (PE) firms are investment firms that acquire equity shares in companies. The goal of PE firms is to exit the investment after few years with a substantial increase in value. PE firms often claim to outperform the market, i.e. to create alpha.
The overall aim of this paper is to unravel the mystery of value creation in the PE industry. First, the author presents a conceptual framework for value creation in the PE industry based on a multiple valuation model that breaks down value creation into different elements. Second, the paper evaluates whether PE firms really create value by analysing and combining results from prior empirical studies based on the conceptual framework.
The results show that existing empirical evidence is mixed but that there is indeed a tendency toward a positive evidence that PE firms create economic value in average. However, there are methodological difficulties in measuring the value creation and studies are often subject to bias. Finally, it is pointed out that the question whether PE firms really create value has to be viewed from different perspectives such as the perspective of the PE firm, the investors and the portfolio companies.
The automation of work by means of disruptive technologies such as Artificial Intelligence (AI) and Robotic Process Automation (RPA) is currently intensely discussed in business practice and academia. Recent studies indicate that many tasks manually conducted by humans today will not in the future. In a similar vein, it is expected that new roles will emerge. The aim of this study is to analyze prospective employment opportunities in the context of RPA in order to foster our understanding of the pivotal qualifications, expertise and skills necessary to find an occupation in a completely changing world of work. This study is based on an explorative, content analysis of 119 job advertisements related to RPA in Germany. The data was collected from major German online job platforms, qualitatively coded, and subsequently analyzed quantitatively. The research indicates that there indeed are employment opportunities, especially in the consulting sector. The positions require different technological expertise such as specific programming languages and knowledge in statistics. The results of this study provide guidance for organizations and individuals on reskilling requirements for future employment. As many of the positions require profound IT expertise, the generally accepted perspective that existing employees affected by automation can be retrained to work in the emerging positions has to be seen extremely critical. This paper contributes to the body of knowledge by providing a novel perspective on the ongoing discussion of employment opportunities, and reskilling demands of the existing workforce in the context of recent technological developments and automation.
