Exit or Non-exit? Case Study of Blackstone’s Stake Sale in Mphasis

IF 2.3 Q3 BUSINESS
S. Veena Iyer
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引用次数: 0

Abstract

This case illustrates a specific type of private equity exit where the portfolio investment is sold to another fund of the same firm. This case highlights the differing motivations of the stakeholders involved and possible conflicts of interest, which can have ethical ramifications. While secondary sale exits are common in private equity, sale within the same firm is a recent phenomenon that gives rise to more conflicts of interest. This is one of few cases that gives prime space to the personal motivations of stakeholders and ethical issues, apart from the private equity business nuances. Written as a teaching case with the primary motive to drive home certain aspects of the workings of a private equity firm, it describes an unconventional exit made by Blackstone Inc. from one of its largest private equity investments in India, Mphasis Ltd. It has been built using secondary sources, particularly company documents and announcements, besides media reports surrounding the event. We conclude that the compensation structures of the general and limited partners, respectively, come in the way of complete goal congruence and such deals lend themselves to more than the usual conflicts of interest. Unethical behaviour on the part of the general partners is especially possible, including continuous earning of fees and avoiding clawback. Ambiguity in private firms’ valuation adds to the possibility of unethical decision-making.
退出还是不退出?Blackstone 出售 Mphasis 股份的案例研究
本案例说明了一种特殊类型的私募股权退出,即投资组合投资出售给同一家公司的另一只基金。本案例强调了相关利益方的不同动机和可能存在的利益冲突,这可能会产生道德影响。虽然二次出售退出在私募股权投资中很常见,但在同一公司内部出售是最近才出现的现象,会引发更多的利益冲突。除了私募股权业务的细微差别外,本案例是为数不多的对利益相关者的个人动机和道德问题给予主要篇幅的案例之一。作为一个教学案例,它的主要动机是让人们了解私募股权投资公司运作的某些方面,它描述了 Blackstone 公司从其在印度最大的私募股权投资之一 Mphasis Ltd. 的非常规退出。本报告利用二手资料,特别是公司文件和公告,以及围绕该事件的媒体报道来撰写。我们得出的结论是,普通合伙人和有限合伙人各自的报酬结构妨碍了目标的完全一致,此类交易引发的利益冲突远不止一般的利益冲突。普通合伙人的不道德行为尤其可能发生,包括持续赚取费用和避免回扣。私营公司估值的模糊性增加了不道德决策的可能性。
本文章由计算机程序翻译,如有差异,请以英文原文为准。
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来源期刊
CiteScore
7.10
自引率
12.50%
发文量
107
期刊介绍: Global Business Review is designed to be a forum for the wider dissemination of current management and business practice and research drawn from around the globe but with an emphasis on Asian and Indian perspectives. An important feature is its cross-cultural and comparative approach. Multidisciplinary in nature and with a strong practical orientation, this refereed journal publishes surveys relating to and report significant developments in management practice drawn from business/commerce, the public and the private sector, and non-profit organisations. The journal also publishes articles which provide practical insights on doing business in India/Asia from local and global and macro and micro perspectives.
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