VC &PE 2024 Week 3 Discussion Quiz Game (Sec. A)

“New Insights into Private Equity: Empirical Evidence from More Than 500 Buyouts,” (2022) Andreas Gruener and Leon Marburger, The Journal of Portfolio Management

In this article, what do the authors show to be the most significant factor(s) in the historical outperformance of private equity over public equities?

• Lower levels of leverage

• High transaction costs

• Industry specialization

• Geographic specialization

“New Insights into Private Equity: Empirical Evidence from More Than 500 Buyouts,” (2022) Andreas Gruener and Leon Marburger, The Journal of Portfolio Management

What does the article suggest about the correlation between fund size (assets under management) and buyout performance?

• Larger funds tend to perform better due to more resources.

• Smaller funds perform better due to more focused investments.

• There is no correlation between fund size and performance.

• Performance decreases as fund size increases.

“New Insights into Private Equity: Empirical Evidence from More Than 500 Buyouts,” (2022) Andreas Gruener and Leon Marburger, The Journal of Portfolio Management

According to the article, how does private equity's performance trend compare over time to public equities?

• Consistently outperforms public equities.

• Shows a decreasing edge over public equities.

• It has started to underperform public equities recently.

• It has become identical to public equities in terms of returns.

“Public or Private? Determining the Optimal Ownership Structure” (2022) Gregory Brown, Andrea Carnelli Dompé, and Sarah Kenyon, The Journal of Portfolio Management

What is a key benefit of private ownership according to the article?

• Increased regulatory scrutiny

• Higher capital costs

• Better alignment between management and shareholders

• Increased public scrutiny

“Public or Private? Determining the Optimal Ownership Structure” (2022) Gregory Brown, Andrea Carnelli Dompé, and Sarah Kenyon, The Journal of Portfolio Management

What trend does the article suggest about the size of companies choosing to remain private?

• Only small companies choose to stay private

• Larger companies are increasingly staying private

• Mid-size companies are more likely to go public

• There is no clear trend in company size staying private

“Public or Private? Determining the Optimal Ownership Structure” (2022) Gregory Brown, Andrea Carnelli Dompé, and Sarah Kenyon, The Journal of Portfolio Management

According to the authors' "tradeoff theory" model, what determines the choice between public and private ownership of a company as a function of size?

• A company will choose public ownership when the costs of being public, such as agency and listing costs, outweigh the benefits of a lower cost of capital.

• A company will choose private ownership when the benefits of lower agency costs and better governance in private markets exceed the cost savings from lower capital costs in public markets.

• A company will choose public ownership when the benefits from a lower cost of capital outweigh the combined costs of agency and listing fees.

• • A company will remain private regardless of size as long as private markets provide sufficient capital.

“Public or Private? Determining the Optimal Ownership Structure” (2022) Gregory Brown, Andrea Carnelli Dompé, and Sarah Kenyon, The Journal of Portfolio Management

What future trend does the article predict for private markets?

• A decrease in private market growth

• Stabilization with no significant growth or decline

• Expansion of private markets through traditional buyout and venture funding models

• A shift back towards public markets

“Association of Private Equity Acquisition of Physician Practices With Changes in Health Care Spending and Utilization” (2022) Yashaswini Singh, MPA; Zirui Song, MD, PhD; Daniel Polsky, PhD, MPP; Joseph D. Bruch, PhD; Jane M. Zhu, MD, MPP, MSHP, JAMA Health Forum, vol.3, no.9

What was the effect of private equity acquisition on the average charges per claim in physician practices?

• Decreased

• Increased

• No change

• Unable to tell

“Association of Private Equity Acquisition of Physician Practices With Changes in Health Care Spending and Utilization” (2022) Yashaswini Singh, MPA; Zirui Song, MD, PhD; Daniel Polsky, PhD, MPP; Joseph D. Bruch, PhD; Jane M. Zhu, MD, MPP, MSHP, JAMA Health Forum, vol.3, no.9

What was the change in the number of unique patients seen at practices after private equity acquisition?

• Decreased

• Increased

• No change

• Unable to tell

“Association of Private Equity Acquisition of Physician Practices With Changes in Health Care Spending and Utilization” (2022) Yashaswini Singh, MPA; Zirui Song, MD, PhD; Daniel Polsky, PhD, MPP; Joseph D. Bruch, PhD; Jane M. Zhu, MD, MPP, MSHP, JAMA Health Forum, vol.3, no.9

According to the study, which of the following specialties showed an increase in both charges per claim and number of patients seen after private equity acquisition?

• Dermatology

• Gastroenterology

• Ophthalmology

• All of the above