Wealth effects of private equity placements: Evidence from Singapore

TY - JOUR

T1 - Wealth effects of private equity placements

T2 - Evidence from Singapore

AU - Chen, Sheng Syan

AU - Ho, Kim Wai

AU - Lee, Cheng Few

AU - Yeo, Gillian H.H.

PY - 2002/5

Y1 - 2002/5

N2 - We examine institutional characteristics and the wealth effects of private equity placements in Singapore. Our findings show that private placements in Singapore generally result in a negative wealth effect and a reduction in ownership concentration. We find that at high levels of ownership concentration, the relation between abnormal returns and changes in ownership concentration is significantly negative. We also show that the market reacts less favorably to placements in which management ownership falls below 50%, but more favorably to issues to single investors. We do not find evidence suggesting that our results are due to an information effect.

AB - We examine institutional characteristics and the wealth effects of private equity placements in Singapore. Our findings show that private placements in Singapore generally result in a negative wealth effect and a reduction in ownership concentration. We find that at high levels of ownership concentration, the relation between abnormal returns and changes in ownership concentration is significantly negative. We also show that the market reacts less favorably to placements in which management ownership falls below 50%, but more favorably to issues to single investors. We do not find evidence suggesting that our results are due to an information effect.

KW - Equity offerings

KW - Ownership structure

KW - Private placements

UR - http://www.scopus.com/inward/record.url?scp=33747066621&partnerID=8YFLogxK

UR - http://www.scopus.com/inward/citedby.url?scp=33747066621&partnerID=8YFLogxK

U2 - https://doi.org/10.1111/1540-6288.00010

DO - https://doi.org/10.1111/1540-6288.00010

M3 - Article

SN - 0732-8516

VL - 37

SP - 165

EP - 183

JO - Financial Review

JF - Financial Review

IS - 2

ER -