infonet-economy

Networks can establish business connections and facilitate information flows; but how valuable are they in competitive settings, such as in the deal generation of private equity funds? We find that educational ties between management teams of acquiring fund and target company are frequent (around 15%) and increase the odds of winning a deal (by 79%). When competing with other funds, exclusivity tends to matter more than the university from which it derives. In addition, educational ties also allow prevailing home bias to be mitigated. Yet, the pure existence of network-based relationships does not automatically lead to better deal performance.