Private equity firm heterogeneity and cross-border acquisitions

We study the global competition among private equity (PE) buyout firms. Using a detailed database of PE firm characteristics, we investigate how PE firm heterogeneity across strategy and performance affects the volume of global acquisitions. A one-standard-deviation increase in a firm's average internal rate of return is associated with an approximate doubling of the number of deals in any given country. We also find that transaction costs associated with geographic, cultural, and administrative distance matter to different degrees across PE firms, and that these differences are related to the strategic profiles of the firms.