The Relation Between Co-Investing and the Level of Competition in the Private Equity Market

The purpose of this study is to evaluate the relation between the co-investment activity and the level of competitionin the PE buyout market. The sample used for this research consistof 5208 PE backed buyout deals. The distinction is made between co-investment, regular and consortiumdeals. Thedeals were completedbetween 1998 and 2017.The level of dry-powder capital is used as a proxy for competition on the PE market. By means of an OLS regression with Newey-west standard errors are the relations empirically studied. The empirical results show apositive relationbetweenco-investment activityand the level of competition. The results showfor the consortiumand regular deal activityno relation. Even thoughthe research findingsare as stated. In this research, because ofmodel limitations, the empirical findings will be interpreted as positive correlations between co-investment activity and competition and no correlationsbetween regular and consortiumdeal activity and competition.