Strategic Intermediation in Corporate Asset Markets: A Qualitative Literature Review on the Role of Non-Venture Private Equity Firms
DOI:
https://doi.org/10.70142/ijbge.v3i1.426Keywords:
Private Equity, Strategic Intermediation, Corporate Asset Markets, Buyouts, Resource RedeploymenAbstract
This qualitative literature review explores the strategic role of non-venture private equity (PE) firms as intermediaries in corporate asset markets. Distinct from venture capitalists, these PE firms specialize in acquiring, restructuring, and reallocating mature corporate assets, thereby enhancing market efficiency and value creation. By synthesizing recent studies, this review highlights how non-venture PE firms facilitate resource redeployment, drive operational improvements, and influence corporate governance. Comparative analysis reveals their unique ability to exploit inefficiencies through carve-outs, platform building, and targeted acquisitions. The review also examines emerging ESG considerations and critiques regarding short-termism and stakeholder impact. While the literature acknowledges the transformative role of these firms, it also identifies limitations in theoretical integration and empirical coverage. This study contributes to a deeper understanding of how non-venture PE firms shape firm boundaries, market structures, and the evolving logic of strategic intermediation.
References
Adegbesan, J. A. (2009). On the origins of competitive advantage: Strategic factor markets and heterogeneous resource complementarity. Academy of Management Review, 34(3), 463–475.
Aggarwal, V. A., & Hsu, D. H. (2014). Entrepreneurial exits and innovation. Management Science, 60(4), 867–887.
Aghamolla, C., & Hashimoto, T. (2020). Information arrival, delay, and clustering in financial markets with dynamic freeriding. Journal of Financial Economics, 138(1), 27–52.
Aghion, P., Van Reenen, J., & Zingales, L. (2013). Innovation and institutional ownership. American Economic Review, 103(1), 277–304.
Ahuja, G., Coff, R. W., & Lee, P. M. (2005). Managerial foresight and attempted rent appropriation: Insider trading on knowledge of imminent breakthroughs. Strategic Management Journal, 26(8), 791–808.
Argyres, N. S., & Zenger, T. R. (2012). Capabilities, transaction costs, and firm boundaries. Organization Science, 23(6), 1643–1657.
https://doi.org/10.1287/orsc.1110.0725
Axelson, U., Strömberg, P., & Weisbach, M. S. (2009). Why are buyouts levered? The financial structure of private equity funds. Journal of Finance, 64(4), 1549–1582.
Barberis, N., & Thaler, R. (2003). A survey of behavioral finance. In G. M. Constantinides, M. Harris, & R. M. Stulz (Eds.), Handbook of the Economics of Finance (Vol. 1, Part B, pp. 1053–1128). Elsevier.
Bardolet, D., Fox, C. R., & Lovallo, D. (2011). Corporate capital allocation: A behavioral perspective. Strategic Management Journal, 32(13), 1465–1483.
Barkema, H. G., & Schijven, M. (2008). How do firms learn to make acquisitions? A review of past research and an agenda for the future. Journal of Management, 34(3), 594–634. https://doi.org/10.1177/0149206308316968
Barney, J. B. (2018). Why resource-based theory’s model of profit appropriation must incorporate a stakeholder perspective. Strategic Management Journal, 39(13), 3305–3325. https://doi.org/10.1002/smj.2949
Benner, M. J., & Zenger, T. (2016). The lemons problem in markets for strategy. Strategy Science, 1(2), 71–89. https://doi.org/10.1287/stsc.2016.0012
Bloom, N., Sadun, R., & Van Reenen, J. (2015). Do private equity owned firms have better management practices? American Economic Review, 105(5), 442–446. https://doi.org/10.1257/aer.p20151033
Braun, R., Jenkinson, T., & Stoff, I. (2017). How persistent is private equity performance? Evidence from deal-level data. Journal of Financial Economics, 123(2), 273–291. https://doi.org/10.1016/j.jfineco.2016.11.008
Capron, L., & Shen, J. C. (2007). Acquisitions of private vs. public firms: Private information, target selection, and acquirer returns. Strategic Management Journal, 28(9), 891–911. https://doi.org/10.1002/smj.612
Castellaneta, F., & Gottschalg, O. (2016). Does ownership matter in private equity? The sources of variance in buyouts’ performance. Strategic Management Journal, 37(2), 330–348. https://doi.org/10.1002/smj.2344
Castellaneta, F., & Zollo, M. (2015). The dimensions of experiential learning in the management of activity load. Organization Science, 26(1), 140–157. https://doi.org/10.1287/orsc.2014.0942
Chen, M., Kaul, A., & Wu, B. (2019). Adaptation across multiple landscapes: Relatedness, complexity, and the long-run effects of coordination in diversified firms. Strategic Management Journal, 40(11), 1791–1821.
Cumming, D., Siegel, D. S., & Wright, M. (2007). Private equity, leveraged buyouts and governance. Journal of Corporate Finance, 13(4), 439–460.
Davis, G. F. (2016). The vanishing American corporation: Navigating the hazards of a new economy. Berrett-Koehler Publishers.
Dittmar, A., Li, D., & Nain, A. (2012). It pays to follow the leader: Acquiring targets picked by private equity. Journal of Financial and Quantitative Analysis, 47(5), 901–931. https://doi.org/10.1017/S0022109012000238
Foss, N. J., Klein, P. G., Lien, L. B., Zellweger, T., & Zenger, T. (2021). Ownership competence. Strategic Management Journal, 42(2), 302–328.
Gans, J., & Ryall, M. D. (2017). Value capture theory: A strategic management review. Strategic Management Journal, 38(1), 17–41.
Gompers, P., Kaplan, S. N., & Mukharlyamov, V. (2016). What do private equity firms say they do? Journal of Financial Economics, 121(3), 449–476.
https://doi.org/10.1016/j.jfineco.2016.06.003
Grace Yulianti, Benardi Benardi, & Seger Santoso. (2024). Peran Ekuitas Swasta dalam Penyelesaian Bank Gagal Pascakrisis Keuangan dan Implikasinya terhadap Stabilitas Keuangan. Jurnal Visi Manajemen, 10(2), 115–122.
https://doi.org/10.56910/jvm.v10i2.554
Grimpe, C., & Hussinger, K. (2014). Resource complementarity and value capture in firm acquisitions: The role of intellectual property rights. Strategic Management Journal, 35(12), 1762–1780.
Guo, S., Hotchkiss, E. S., & Song, W. (2011). Do buyouts (still) create value? Journal of Finance, 66(2), 479–517.
Hirsch, L. (2021, February 17). The Carlyle Group ties a $4.1 billion credit line to board diversity. New York Times.
Hoskisson, R. E., Shi, W., Yi, X., & Jin, J. (2013). The evolution and strategic positioning of private equity firms. Academy of Management Perspectives, 27(1), 22–38. https://doi.org/10.5465/amp.2011.0108
Humphery-Jenner, M. (2012). Private equity fund size, investment size, and value creation. Review of Finance, 16(3), 799–835.
Humphery-Jenner, M. (2014). Takeover defenses, innovation, and value creation: Evidence from acquisition decisions. Strategic Management Journal, 35(5), 668–690.
Humphery-Jenner, M., Sautner, Z., & Suchard, J. A. (2017). Cross-border mergers and acquisitions: The role of private equity firms. Strategic Management Journal, 38(9), 1688–1700.
Indahl, R., & Jacobsen, H. G. (2019). Private equity 4.0: Using ESG to create more value with less risk. Journal of Applied Corporate Finance, 31(2), 34–41.
https://doi.org/10.1111/jacf.12336
Jackson-Moore, W., & Kerrigan, V. (2021, January 18). Can private equity save the world? Retrieved from https://www.pwc.com/gx/en/issues/reinventing-the-future/take-on-tomorrow/private-equity-esg-investing.html
Kaplan, S. N., & Strömberg, P. (2009). Leveraged buyouts and private equity. Journal of Economic Perspectives, 23(1), 121–146. https://doi.org/10.1257/jep.23.1.121
Kaul, A., & Wu, B. (2016). A capabilities-based perspective on target selection in acquisitions. Strategic Management Journal, 37(6), 1220–1239.
Kaul, A., Nary, P., & Singh, H. (2018). Who does private equity buy? Evidence on the role of private equity from buyouts of divested businesses. Strategic Management Journal, 39(5), 1268–1298.
Klein, P. G., Foss, N. J., Lien, L. B., Zellweger, T., & Zenger, T. (2021). Ownership competence. Strategic Management Journal, 42(2), 302–328.
Mahoney, J. T., & Qian, L. (2013). Market frictions as building blocks of an organizational economics approach to strategic management. Strategic Management Journal, 34(9), 1019–1041. https://doi.org/10.1002/smj.2046
Makri, M., Hitt, M. A., & Lane, P. J. (2010). Complementary technologies, knowledge relatedness, and invention outcomes in high technology mergers and acquisitions. Strategic Management Journal, 31(6), 602–628.
Maksimovic, V., & Phillips, G. (2001). The market for corporate assets: Who engages in mergers and asset sales and are there efficiency gains? Journal of Finance, 56(6), 2019–2065. https://doi.org/10.1111/0022-1082.00489
Matthews, G., Bye, M., & Howland, J. (2009). Operational improvement: The key to value creation in private equity. Journal of Applied Corporate Finance, 21(3), 21–27.
Nary, P., & Kaul, A. (2023). Private equity as an intermediary in the market for corporate assets. Academy of Management Review, 48(4).
https://doi.org/10.5465/amr.2020.0168
Patricia, M. C. (2023). Sustainable Retail Financing in Turbulent and Difficult Market Conditions: A Dynamic Capability Perspective. Journal of Management and Entrepreneurship Research, 4(1), 17-29.
https://doi.org/10.34001/jmer.2023.6.04.1-35
Porter, M. E., & Kramer, M. R. (2011). Creating shared value. Harvard Business Review, 89(1), 62–77.
Ruslaini Ruslaini, & Eri Kusnanto. (2020). Sustainability Dalam Rantai Pasok Global: Tinjauan Literatur Dari Perspektif Bisnis Internasional dan Manajemen Rantai Pasok. Journal of Business, Finance, and Economics (JBFE), 1(2).
https://doi.org/10.32585/jbfe.v1i2.5691
Sakhartov, A. V. (2018). Stock market undervaluation of resource redeployability. Strategic Management Journal, 39(4), 1059–1082.
Snyder, H. (2019). Literature review as a research methodology: An overview and guidelines. Journal of Business Research, 104, 333–339.
https://doi.org/10.1016/j.jbusres.2019.07.039
Souder, D., & Bromiley, P. (2012). Explaining temporal orientation: Evidence from the durability of firms’ capital investments. Strategic Management Journal, 33(5), 550–569.
Thomas, D. R. (2006). A general inductive approach for analyzing qualitative evaluation data. American Journal of Evaluation, 27(2), 237–246.
https://doi.org/10.1177/1098214005283748
Tranfield, D., Denyer, D., & Smart, P. (2003). Towards a methodology for developing evidence‐informed management knowledge by means of systematic review. British Journal of Management, 14(3), 207–222. https://doi.org/10.1111/1467-8551.00375
Webster, J., & Watson, R. T. (2002). Analyzing the past to prepare for the future: Writing a literature review. MIS Quarterly, 26(2), xiii–xxiii.
Whittemore, R., & Knafl, K. (2005). The integrative review: Updated methodology. Journal of Advanced Nursing, 52(5), 546–553. https://doi.org/10.1111/j.1365-2648.2005.03621.x
