Argentum Award 2020 goes to duo from SSE

The winners of the Argentum Award 2020 are Nicholas Held (left) and Jonas Bäckman, alumni from the Stockholm School of Economics. Photo: Private

In their thesis, the winners examined the CEO turnover in private equity-owned companies and compared it with other privately held companies in Sweden. “A highly interesting, innovative and topical issue,” is the verdict from the jury.

“We wanted to examine how private equity has evolved in the European market, from almost solely focusing on financial leverage and arguably low hanging fruits in the industry’s early phase, to now creating more fundamental value by means of active management and operational improvements. We believed that CEO turnover is a readily observable indicator of this evolvement,” Held says on a Teams call from Munich, where he works as an Investment Analyst at Orlando Management AG.

“The Swedish market was an interesting case study because the private equity industry is fairly mature. The availability of data is also unique in Sweden, which made it possible to control for variables such as age and retirement, as well as to obtain granular data on company performance and characteristics,” says Bäckman, now working as a private equity analyst at Main Capital Partners in Stockholm.

The jury led by Associate Professor Carsten G. Bienz at the Norwegian School of Economics (NHH) was unanimous in its decision and said that the thesis deals with “a highly interesting, innovative and topical issue,” and further on that, “it is very well designed, executed and written” (read the thesis here).

CEO turnover highest when acquiring from founders

According to the Harvard Business Review, PE firms nearly always replace the CEO after making an investment, which might give PE executives a far greater ability to observe leadership trends and learn from successes and mistakes.

Held and Bäckman examined CEO turnover in private equity-owned companies and other privately held companies in Sweden. More specific, they used unique hand-picked data from 124 private equity-sponsored transactions and compared it to data from privately held companies observations in Sweden between 1999 and 2017.

The sample revealed significant differences in CEO turnover between the private equity held companies (66 %) and other privately held companies (39 %).

“A big shortcoming of existing studies is that they focus on the beginning of the holding period. We wanted to look at the entire investment period, to better understand the nuances of the PE investment process,” says Bäckman.

One of the main findings was that CEO turnover was highest if the entry type for the fund was an acquisition from founders or founding families (74 %). This turnover did not always happen right after the takeover, but rather at the exit stage in some cases, e.g. founders that agreed to stay with the company after a PE fund invested but was not motivated for subsequent ownership.

“This matches the findings of empirical studies and to some extent my work experience as well. Founders may want to withdraw from the company they built for various reasons, often age, and may not have family members that wish to succeed them. In that sense, private equity can facilitate these succession situations and add value by creating a more efficient market, especially for smaller company ownership, ensuring long-term viability,” says Held.

Bäckman and Held were not able to find causality between company performance and CEO turnover, however the companies with PE ownership exhibited superior financial performance.

“The corona crisis is our financial crisis”

Both Held and Bäckman pursued internships in the PE industry during their studies, and are now working for PE firms in Germany and Sweden.

“I was attracted by the multifaceted type of work in the industry and the fact that it is not only number crunching, but also M&A, financing, commercial, as well as tax and legal aspects. You get broad exposure to industries and companies,” says Held.

“For me, the job offers aspects of both management consulting and investment banking, the best of both worlds. You have an adrenaline-fueled deal process before you work strategically with the portfolio company afterwards. I find it motivating that we get to work with companies for many years and really learn to understand their strengths and opportunities,” Bäckman adds.

The prize winners feel lucky they found jobs before the corona crisis and they now want to learn as much as they can from the crisis.

“Aside from the blatant miseries this crisis brought along, this is in many ways also our financial crisis, and therefore instructive from a personal learning perspective. Private equity firms have spent much of the beginning of the year supporting the portfolio companies and getting an overview of which companies needed the most assistance. I believe PE-backed companies are uniquely positioned to react to the current situation because PE firms can not only contribute liquidity, but also experience and expertise, not the least from past crises,” Held explains.

The duo is appreciative of the advice they received from their supervisor, Per Strömberg, SSE Centennial Professor of Finance and Private Equity.

“We want to express our profound gratitude to Per, who is quite busy but still supervised several groups of master’s students. He was always well prepared to give helpful input and guidance,” Held says.

Read our interviews with the Argentum Award winners from 2018 and 2019.


Argentum Award 2020

  • The winners of the Argentum Prize 2020 are Jonas Bäckman and Nicholas Held, who wrote the thesis Managing the Deal: CEO Turnover in LBOs – Evidence from Sweden as part of their M.Sc. in Finance at the Stockholm School of Economics in spring 2019.
  • The jury consisted of Associate Professor Carsten Gero Bienz (Norwegian School of Economics, NHH), Uwe Walz (Goethe-Universität Frankfurt am Main), and Julia Hirsch (Universidad Autónoma de Querétaro).
  • The jury was unanimous in their decision and said that the thesis deals with “a highly interesting, innovative and topical issue,” and further on that, “it is very well designed, executed and written.”
  • The duo’s supervisor was Per Strömberg, SSE Centennial Professor of Finance and Private Equity.

Facts about the award

  • Each year, Argentum hands out an award for the best master’s thesis within private equity in the Nordics, with a cash prize of NOK 20 000.
  • The award was established to encourage students to analyse topics within the field of private equity. Further, the award should encourage the production of theses of the highest quality.
  • A committee appointed by the Argentum Centre for Private Equity at NHH, the Norwegian School of Economics, will assess the submitted theses.
  • You can apply for the Argentum Award 2021 by sending the thesis, name of the supervisor, and name of the academic institution to The deadline is March 1st, 2021.