Built for Bad Times? Private Equity and Operational Performance Across Economic Downturns in Sweden

Sammanfattning

This paper studies how Swedish firms acquired through leveraged buyouts between 2000 and 2020 perform operationally and financially compared with similar non-PE-backed firms. We find that firms tend to grow faster after an LBO; employee count, sales, capital employed, and capital expenditure all rise over the three years following the deal. This growth advantage appears to persist during macroeconomic downturns; capital expenditure nearly doubles during the Global Financial Crisis, remains flat through the European Debt Crisis, and holds steady during COVID-19 even as profitability weakens. These findings are largely consistent with the credit-constraint channel proposed by Boucly, Sraer, and Thesmar (2011); PE ownership matters most precisely when external credit dries up.