Private equity and pensioners: Value creation through pension adjustments?

The purpose of this research is to explore the use of value enhancing pension strategies by private equity invested companies. In order to perform this task, this study analyses possible strategies to create value through implementing changes in the pension system. Statistical information on private equity invested companies across the United States, United Kingdom and The Netherlands is used to compare the pension characteristics of these companies to a representative control group. The results of this comparison indicate a negative effect of private equity investment on the level of pension benefits and a positive influence on the allocation of pension assets to relatively risky asset classes. These results yield important implications for private equity firms, policy makers and employee representative groups.