PT - JOURNAL ARTICLE AU - Maher Kooli TI - Does Earnings Management Explain the Performance of Canadian Private Placements of Equity? AID - 10.3905/JPE.2009.12.2.086 DP - 2009 Feb 28 TA - The Journal of Private Equity PG - 86--94 VI - 12 IP - 2 4099 - https://pm-research.com/content/12/2/86.short 4100 - https://pm-research.com/content/12/2/86.full AB - Using a sample of 434 Canadian private placements of equity (PPEs) that occurred from 1996 to 2005, we first examine the long-run performance following PPEs, and secondly, we analyze the earnings management hypothesis. We find that Canadian PPEs do underperform on a calendar-time basis as well as on event-time basis. We also find that most aggressive earnings management firms issue larger offerings than most conservative ones but post the worst long term performance. The result for the most aggressive quartile is consistent with the over-optimism hypothesis. However, we find that private placements issuers unlike public issuers are less inclined to manage earnings around the time of the offering.TOPICS: Private equity, statistical methods, developed, factor-based models