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Private equity is a source of finance and a governance device characterised by active monitoring through sponsors that intervene in targets’ corporate governance. As sponsors are skilled and motivated acquirors, we investigated whether corporate governance mechanisms mitigate leveraged targets’ risk of financial distress differently compared to non-acquired companies through the lenses of agency theory and resource-based theories. We found that targets and non-acquired companies are not significantly different in terms of corporate governance features, but sponsors are skilled enough to choose corporate governance members to mitigate risk more, especially when boards are smaller, have busier industry expert directors, and mandate execution to more managers. These results can be useful to targets, targets’ investors and lenders, and policymakers.

Syndication allows two or more private equity sponsors to takeover targets that would have been overlooked due to lacking financial resources, risk capacity and/or skills (especially highly specialized sponsors may consider syndication). While financial resources mostly belong to size, skills come from sponsor’s experience: beyond its amount, different types of skills i.e. specialization profiles – come from different types of experience. Literature about private equity syndication is mostly devoted to its determinants, while the performance implications of syndication compared to stand-alone private equity are under-researched. This paper investigates the effect of different types of sponsors’ previous experience on the target’s performance (ROA) and whether this relation changes in syndicated versus stand-alone deals