The Effect of Private Equity Investments on Financial Performance of Firms in Kenya
Abstract
Private equity investment has emerged as a key area of focus in the modern corporate world.
The study analysed the effect of private equity funds on the financial performance of firms in
Kenya. The study utilized a descriptive research design and secondary data was collected from
25 firms that used private equity during the year 2005 to 2017. Statistical Package for SPSS
was used to analyze data using descriptive methods, correlation analysis, and regression
analysis. Based on the findings, it was established that private equity strategy that was mostly
adopted by the firms was venture capital while the least strategy adopted was mezzanine
financing. In general, the study established that investment in private equity had statistically
significant effect on the financial performance of the firms. Therefore, organizations are
recommended to adopt the private equity funds since they boost financial performance. The
study also recommended the firms to structure their private equity investment portfolios in a
manner that ensures maximum returns at lower risks. Furthermore, the study recommended the
government to put in place effective measures to make sure that the economic climate in the
country is conducive for the investment in private equity fund to grow.
Publisher
University of Nairobi
Rights
Attribution-NonCommercial-NoDerivs 3.0 United StatesUsage Rights
http://creativecommons.org/licenses/by-nc-nd/3.0/us/Collections
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