PE portfolio companies faring well?

July 25, 2008 | By Jim Kim

A new study by Ernst & Young has found that in 2007, portfolio companies of private equity firms once again outperformed public companies. That marks the third year in a row that portfolio companies have fared better, IDD reports. The "enterprise value," or value of a firm's combined equity value and debt, of portfolio companies rose 24 percent, while publicly traded companies a posted a 9 percent rise in enterprise value. The portfolio companies that fared best were larger companies, which posted a 30 percent increase in enterprise value. The study also found that secondary exits were not deleterious to the health of the portfolio company, as some tend to assume. Companies sold to other private equity firms performed well under the second owners, posting an average growth rate of 27 percent.

For more:
- here's the IDD article (For FierceFinance readers)