2010 BVA Essay Award Winner
The Belgian Venture Capital & Private Equity Association (BVA) granted its BVA Essay Award for the 4th time, in co-operation with Deloitte.
This year, the award for best essay about the Private Equity and Venture Capital industry went to Vivian Mathieu of the Louvain School of Management, Université Catholique de Louvain, with his dissertation submitted for the degree of Master in Business Engineering “Value creation in Private Equity backed Buyouts”, and this under the direction of Professor Armin Schwienbacher.
The winning essay was presented for the degree of Master in Business Engineering at the UCL (Year 2008-2009) and investigates the different drivers creating value in companies after their buyout through Private Equity investment.
The essay focuses on the Belgian Private Equity Market with the objective to examine and provide a better understanding of its dynamic drivers of value creation. Previous studies had already indicated that in a typical successful buyout, the four major value drivers were: (i) sales growth; (ii) margin expansion; (iii) financial leveraging and (iv) dynamic valuation multiples. The author has studied a large sample of Belgian buyouts which indicated that a wide range of transactions are not following the exact same route of value creation. The value creation of the buyouts did indeed vary significantly and the author identified in his essay that the Value capture in Belgian buyouts has been highly influenced by “market timing” and by “proactive strategies” of the buyout firm.
In order to assess and explain the Equity values created by Private Equity (PE) backed buyouts, the author applied and modified the “Dupont System”, an internationally known complex financial model.
The outcome of the model on the Belgian PE Buyouts indicated the impact of:
– Market timing: which could be demonstrated by (i) unexpected cyclical sales in a particular industry or by general macroeconomic conditions and (ii) by enjoying the continuous rise of valuation multiples or a subsequent drop by the collapse of the Equity markets.
– Proactive strategies of value creation indentified: ( i) the “buy-and-build” strategy in order to build a larger, more profitable and stronger group; (ii) the Organic growth pursued enabling a successful product or technology to be made much more profitable and (3) by significant operating efficiency improvement s as expressed by the expansion of the operating margin.
Three other participants to the BVA Essay Award edition 2010 wrote such an excellent essay, that we have decided to post them here as well, in alphabetical order.
Julien Balleux: "LBO Transactions: analysis of the tranching process"
Andy Lardon: "Impact van private equity backed buy-outs op de performantie van Belgische familie-ondernemingen"
Sylvia Verhofstadt & Ils Willen: "De impact van een buy-out op de loonkosten en het personeelsbestand"
2009 BVA Essay Award Winner
This year, the award for best essay about the Venture Capital - Private Equity industry went to Pieterjan Behaeghe and Tim Delameilleure of the University of Ghent. The authors were granted the prize money for their essay “Determinants of the Valuation of Venture Capital Transactions”.
The winning essay was presented for the Master degree in Applied Economics at the University of Ghent (Year 2007-2008) and investigates in detail which elements determined the valuation at the time of entry of Venture Capital in new and innovative companies. The paper is the outcome of an intensive research whereby 126 Venture Capital transactions In Belgium, UK, France and Germany, were analysed.
The essay confirms by statistical methods that Venture Capitalists rate a higher value to companies in high technology sectors, and this in correlation to their higher incurred costs (losses) and their growth. Also larger companies, in Assets and Net Book Value, score relatively higher in their valuation.
2008 BVA Essay Award Winner
The jury selected as winner of the BVA Essay award 2008: "De rol van Venture Capital in het groeipad van early stage high tech ondernemingen" (Essay to qualify for the grade of Master in Applied Economics, University of Gent). Please click the hyperlink above to view the winning thesis of 2008.
Author: Annelies Bobelyn
The main conclusions of the winning thesis were that:
- companies that received VC showed a higher growth in number of employees, total assets and turnover (if financing was done by a large or super sized fund)
- companies that did not receive VC, showed a higher growth in P&L and cashflow
- these effects were often enhanced by the size of the investment fund.
2007 BVA Essay Award Winner
For the first BVA Essay Award, the BVA received six valid essays which passed the selection criteria. The members of the jury consisted of two Academic Members (professors Th. Peeters and J.-P. Couvreur) and three Industry Members (Hilde Famaey, André-Xavier Cooreman and Ludo Verbist), whereby the jury’s Chairman was André-Xavier Cooreman, chairman of the BVA.
The jury selected as winner of the BVA Essay award 2007: "The Performance of Business Angel backed companies" (Essay to qualify for the grade of Master in Applied Economics, University of Gent). Please click the hyperlink to view the winning thesis of 2007.
Author: Frank Ceenaeme
The main conclusion of this essay is that no real –positive - difference could be noticed in performance between BA companies and NBA companies, except that many BA companies would not have existed without Business Angels’ financing.
The BVA Essay Award
In cooperation with Deloitte, the Belgian Venture Capital & Private Equity Association vzw/asbl (“BVA”) wants to promote academic research concerning venture capital and private equity, which in turn should lead to a better understanding of these activities and their added value.
A first initiative towards this goal is the organisation of an annual BVA Essay Award for the best student paper on a masters or doctoral level, with a subject relevant to the risk capital industry (in its broadest meaning). The aim is to present this award each year during the annual BVA congress, for the first time on 8 March 2007. Besides the financial reward, the best papers will also be more broadly distributed in the press and among BVA members.
The papers will be judged on 4 criteria :
- Academic quality
- Originality of the approach
- Accessibility and practicality of the subject
- Relevance of the study for the venture capital and private equity sector
€1,500 is awarded to the winning thesis.
Please click here, to find a link to the Rule Book for this contest. The main elements of this rule book are:
- The thesis has been written to get a Master degree (or equivalent, or higher) from a Belgian university.
- The candidacy for the BVA Essay Award has to be accompanied by a recommendation letter from at least 1 professor or lector.
- The thesis must not be older than 2 years.
- The thesis has been graded “with honours” or higher.
Good luck!