Beyond the IPO: Does Sponsor Engagement Matter? Evidence from Nordic Sponsor-Backed IPOs

Sammanfattning

This paper examines whether continued sponsor engagement following an initial public offering (IPO) is associated with stronger operating performance among sponsor-backed firms. Using a sample of 91 Nordic sponsor-backed IPOs between 2000 and 2020, we exploit variation in post-IPO sponsor engagement, measured through retained ownership and board representation, and examine its relationship with operating performance over the three years following listing. We find no evidence that continued sponsor engagement has a positive effect on operating performance. Across all model specifications, neither ownership nor board representation is positively associated with ROA, EBITDA margin, or sales growth. Where statistically significant, the relationship is uniformly negative. We further show that for profitability measures, it is the existence of a retained stake rather than the size of that stake that is associated with performance differences, suggesting that retained ownership more likely captures exit difficulty rather than active governance. In contrast, leverage at IPO is consistently and positively associated with the profitability measures of operating performance, pointing to the capital structure at listing as a more robust predictor of post-listing outcomes than continued sponsor engagement.