Financing, the lifeblood that keeps any firm alive and thriving, takes center stage in Miguel Sousa’s (ORGMAN) research journey. It’s the beating heart of his academic pursuit. One of his key interests lies in Private Equity. In this world, institutional investors and high-net-worth individuals come together to inject capital into privately held companies, ranging from startups to well-established corporations. They become active partners, steering these companies towards growth and profitability.
But these investments are not meant to be forever; they have a limited lifespan. This prompts Miguel to explore exit strategies, especially for large companies. When and how should investors cash in on their investments and realize their gains? While the conventional wisdom often points towards Initial Public Offerings (IPOs), Miguel’s research with Tim Jenkinson (UOxford) reveals a different story. They’ve scrutinized data from 1,022 exit transactions and found that alternative strategies might be more advantageous under specific market conditions, such as selling to another private equity fund (secondary buyouts).
Miguel explains, “After an IPO exit, the companies become public and face increased scrutiny. In contrast, keeping the company private through a secondary buyout allows it to continue employing value-added strategies, like maintaining relatively high levels of debt, which can be challenging for a public company to pursue. These strategies can create even more value, particularly when financial markets are flush with liquidity, as interest rates tend to be lower than usual.”
Private Equity also extends its reach to the funding of startups, fueling research and innovative ideas. Many of these groundbreaking concepts emerge from university ecosystems and their network of business partners. This involvement led Miguel to actively contribute to the development of EUGLOHRIA, an expansion of EUGLOH—a European Alliance of nine universities, including UPorto. EUGLOHRIA’s mission is to advance cutting-edge research and innovation by establishing a collaborative research agenda, facilitating resource sharing, and promoting cooperation between academia and business, all within the realm of Global Health.
