Small scale private equity: Demand versus supply

Research output: Contribution to conferencePaperResearchpeer-review

Abstract

Pecking Order Theory predicts that corporate managers seeking external funding would preferentially use debt before equity (Myers 1984; Myers & Majluf 1984). Contrary to this expectation, our results suggest that a significant percentage (20% of generic SME and 29% of high growth firms (HGFs) respondents) of Australian small and medium-sized enterprises (SMEs) prefer equity funding to debt and would seek equity funding, if it were readily available. In exploring the supply side of small scale private equity (SSPE), our study reveals a mismatch between supply and demand, with supply being virtually non-existent, especially for those SMEs categorized as HGFs. In order to attract investment from PE firms, SMEs need to meet stringent criteria and our study found that only 1-2% of these firms have any chance of qualifying.
Original languageEnglish
Publication statusE-pub ahead of print - Apr 2017
Event8th Financial Markets and Corporate Governance Conference 2017 - Victoria University of Wellington, Wellington, New Zealand
Duration: 20 Apr 201721 Apr 2017
Conference number: 8th
http://www.victoria.ac.nz/sacl/financial-markets-and-corporate-governance-conference-2017

Conference

Conference8th Financial Markets and Corporate Governance Conference 2017
Abbreviated titleFMCG
CountryNew Zealand
CityWellington
Period20/04/1721/04/17
Internet address

Fingerprint

Private equity
Small and medium-sized enterprises
Equity
Funding
High-growth firms
Debt
Managers
Pecking order theory
Mismatch
Supply side

Cite this

Dwyer, B., Duncan, K., & Southam, C. (2017). Small scale private equity: Demand versus supply. Paper presented at 8th Financial Markets and Corporate Governance Conference 2017, Wellington, New Zealand.
Dwyer, Bruce ; Duncan, Keith ; Southam, Colette. / Small scale private equity : Demand versus supply. Paper presented at 8th Financial Markets and Corporate Governance Conference 2017, Wellington, New Zealand.
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Dwyer, B, Duncan, K & Southam, C 2017, 'Small scale private equity: Demand versus supply' Paper presented at 8th Financial Markets and Corporate Governance Conference 2017, Wellington, New Zealand, 20/04/17 - 21/04/17, .

Small scale private equity : Demand versus supply. / Dwyer, Bruce; Duncan, Keith; Southam, Colette.

2017. Paper presented at 8th Financial Markets and Corporate Governance Conference 2017, Wellington, New Zealand.

Research output: Contribution to conferencePaperResearchpeer-review

TY - CONF

T1 - Small scale private equity

T2 - Demand versus supply

AU - Dwyer, Bruce

AU - Duncan, Keith

AU - Southam, Colette

PY - 2017/4

Y1 - 2017/4

N2 - Pecking Order Theory predicts that corporate managers seeking external funding would preferentially use debt before equity (Myers 1984; Myers & Majluf 1984). Contrary to this expectation, our results suggest that a significant percentage (20% of generic SME and 29% of high growth firms (HGFs) respondents) of Australian small and medium-sized enterprises (SMEs) prefer equity funding to debt and would seek equity funding, if it were readily available. In exploring the supply side of small scale private equity (SSPE), our study reveals a mismatch between supply and demand, with supply being virtually non-existent, especially for those SMEs categorized as HGFs. In order to attract investment from PE firms, SMEs need to meet stringent criteria and our study found that only 1-2% of these firms have any chance of qualifying.

AB - Pecking Order Theory predicts that corporate managers seeking external funding would preferentially use debt before equity (Myers 1984; Myers & Majluf 1984). Contrary to this expectation, our results suggest that a significant percentage (20% of generic SME and 29% of high growth firms (HGFs) respondents) of Australian small and medium-sized enterprises (SMEs) prefer equity funding to debt and would seek equity funding, if it were readily available. In exploring the supply side of small scale private equity (SSPE), our study reveals a mismatch between supply and demand, with supply being virtually non-existent, especially for those SMEs categorized as HGFs. In order to attract investment from PE firms, SMEs need to meet stringent criteria and our study found that only 1-2% of these firms have any chance of qualifying.

M3 - Paper

ER -

Dwyer B, Duncan K, Southam C. Small scale private equity: Demand versus supply. 2017. Paper presented at 8th Financial Markets and Corporate Governance Conference 2017, Wellington, New Zealand.