4 REAL OPTIONS IN PRIVATE EQUITY LITERATURE
4.1 R EAL OPTIONS IN P RIVATE E QUITY - STATE OF THE ART LITERATURE CHECK
For the state-of-the-art literature review on real options in PE, a total of five different archives were used to prove the scarcity of the articles on the topic. Some of the articles were already mentioned before in this research as they are an important part of real option or PE theory. The keywords for the search were clear from the topic: “real options” and “private equity.” Both keywords were inside the brackets to exclude unnecessary research papers, e.g. private equity in real estate, et cetera. Next, the findings from each archive are introduced. The found articles are further discussed later in this chapter.
The first researched archive was the EBSCO – Business Source Complete. Figure 13 demonstrates the process and results that were made in that database. After that, Table 3 shows the articles chosen for further examination.
Figure 13. Search Process - EBSCO Business Source Complete
Table 3. Selected publications from EBSCO Business Source Complete
Title Author(s) Published What is it?
Private Equity Arrangements as real options
Chen, A., Conover, J. &
Kensinger, J.
2011 Real Options in PE
Valuing a Leveraged Buyout:
Expansion of the Adjusted Present Value by Means of Real Options Analysis.
Baldi, F. 2005 Valuation
How Do Entrepreneurs View Opportunities: Rose Tinted Spectacles or the Real Options Lens?
Cave, F. & Minty, A. 2004 Real option thinking perspective
Next, the archives of Emerald Journals were researched. In this case, in addition to just research papers, chapter items were search for as well to find additional literature on this very subject.
Figure 14 below demonstrates the search process for Emerald Journals with chapter items included as well. Table 4 below the figure shows the found publications on the topic from Emerald Journals.
"Real Options"
2575 publications
+ "Private Equity"
8 publications
+ peer reviewed 7 publications
Selected for further examination 3 publications
Figure 14. Search Process in Emerald Journals
Table 4. Selected publications from Emerald Journal
Title Author(s) Published What is it?
Private Equity Arrangements as Real Options
Chen, A., Conover, J. &
Kensinger, J.
2011 Real Options in PE
After only finding only the couple book chapters relevant to this research from Emerald Journals, the focus was turned to Science Direct – Elsevier archives. The following Figure 15 shows the research process in that archive, and the articles selected for further examination are shown in Table 5.
"Real Options"
705 publications
+ "Private Equity"
36 publications
+ Research papers 6 publications
Selected for further examination 0 publications
Replaced Research papers with Chapter items
7 publications
Selected for further examination 1 publications
Figure 15. Search process for ScienceDirect - Elsevier
Table 5. Selected publications from ScienceDirect - Elsevier
Title Author(s) Published What is it?
Optimal investment of private equity Liu, Y. & Yang, J. 2015 Optimal PE investment strategy with real option method
The bright and dark side of staging:
Investment performance and the varying motivations of private equity firms
Krohmer, P., Lauterbach, R.
& Calanog, V.
2009 Staging investments in PE funds
Staged venture capital contracting with ratchets and liquidation rights
Leisen, D. 2012 Real options as
anti-dilution (ratchet) and liquidation preference
The archives of Springer Link were analyzed next. As no research articles from this archive were selected for further examination, chapter items were also analyzed. Only one interesting chapter of a book was selected for further examination. Figure 16 and Table 6 show the process and the findings of the research in Springer Link archive.
"Real Options"
5734 publications
+ "Private Equity"
149 publications
+ Research articles 87 publications
Selected for further examination 3 publications
Figure 16. Search process for Springer Link
Table 6. Selected publications from Springer Link
Title Author(s) Published What is it?
Real Options in Private Equity Unchained
Meyer, T. 2014 A book on PE where one
chapter focuses on real options
Lastly, Wiley's archive was researched, including book chapters. The search process is shown in Figure 17. Table X shows all the selected publications for further examination from Wiley archive.
"Real Options"
5777 publications
+ "Private Equity"
148 publications
+ Research articles 43 publications
Selected for further examination 0 publications
Replaced Research articles with Chapter items
102 publications
Selected for further examination 1 publications
Figure 17. Search process for Wiley
Table 7. Selected publications from Wiley
Title Author(s) Published What is it?
Real options in equity partnerships Folta, T. & Miller, K. 2002 Real options in partnerships
ACQUISITION STRATEGIES AS OPTION GAMES
Smit, H. 2005 Integrates real options with game theory
Staged venture capital contracting with ratchets and liquidation rights
As perceptive readers may have recognized, there are some overlappings between the findings of different archives. The following Table 8 collects together all the articles and chapter items that were chosen for further examination. A total of 10 publications were used. In the next part these articles and the couple chapter items are shortly discussed.
Table 8. All publications chosen for further examination
Title Author(s) Published Archive
Private Equity Arrangements as Real Options of the Adjusted Present Value by Means of Real Options Analysis.
Baldi, F. 2005 EBSCO -Business Source
Complete
How Do Entrepreneurs View Opportunities: Rose Tinted Spectacles or the Real Options Lens?
Cave, F. &
Minty, A.
2004 EBSCO -Business Source
Complete
Optimal investment of private equity Liu, Y. & Yang, J.
Staged venture capital contracting with ratchets and liquidation rights
Leisen, D. 2012 ScienceDirect - Elsevier
Real options in equity partnerships Folta, T. &
Miller, K.