1 Introduction

Private Equity (PE) funding has seen an unprecedented rise in the last decade thus becoming an important source of funds for startups as well as for firms that aim to seek buyout due to distress. PE funds are the newer drivers of financialization globally and have become the cornerstone of modern economics and innovation. Initially, PE funds were centered in United States of America (USA). Rather, the spread of most prominent funded companies has been geographically biased with most active PE asset classes being located in the USA (Jensen 1989). However, this mode of financing started growing and stirring towards Europe and Australia as well, with UK leading the pack. PE is a comparatively new asset class and investing done by PE firms in non-publicly traded firms is more of an art rather than a quantitative decision (Demaria 2015). However, PE effect is varied and it has led to theoretically different perspectives to the global PE phenomena (Wood and Wright 2010).

PE has seen a huge rise in the last decade, alongside the bond market, the debt market, and private placement. Froud and Williams (2007) argued that PE has “moved from marginality to center-stage in the past decade”. Gradually, it has now become one of the focal points of many corporate finance studies also. The movement is accompanied by burgeoning literature and the interest of researchers to comprehend the dynamics of the new asset class precisely. Against the backdrop, of these developments, it makes a strong argument to establish the current state of knowledge, the depth and spread of prominent scholars in this area, clearly identifying the major themes as a future research agenda. The paper unpacks the core themes of studies on PE and discovers the drift of its literature from initially being only a part of corporate governance and corporate finance studies and receiving minimal attention (Fenn et al. 1997) to its present status. The theme of the paper is twofold. On one side the paper explores the various theoretical perspectives that PE studies, explore and testify empirically, secondly, it dives deep into the existing literature using a bibliometric analysis to explore core top researchers, top journals, and clusters of PE research and proposes research gaps for further studies.

The perspectives in PE studies range from strategy to corporate governance and from finance to performance and employee-related studies. PE brings important economic and social benefits (Froud & Williams 2007; Cumming & Johan 2007). Specifically, few early studies highlighted the substantial impact of PE in fields of socio-economics (Axelson et al. 2009; Bacon et al. 2008) and for corporate governance (Wright et al. 2009a, b; Wruck 2008; Millson & Ward 2005). PE ownership has benefitted firms specifically after the onerous corporate governance regulation that happened in 2001–02 (Axelson et al. 2009).

The primary focus of most PE studies has been being linkage with Corporate Financial Performance (CFP). The performance of PE funds has always been debatable. Several issues persist which drive this debate, for instance, lack of proper data for research, the reluctance of non-publicly quoted firms to disclose their earnings fully, being the primary reasons. Performance-related PE studies move along three main dimensions. The first one being the performance of PE funds where IRR (internal rate of return) and investment multiples are commonly used metrics (Harris et al. 2014, Brown et al. 2015, Gottschalg et al. 2003), secondly, the performance of PE-backed IPOs (Lewis 2011) and thirdly performance of firms using PE, as a source of funding, specifically under several conditions like extreme regulation. These studies use deal-level data (Malik & Dhankar 2015). The effects of PE on performance and productivity at the organizational level have been investigated in several studies (Harris et al. 2014; Franzoni et al. 2012; Sorenson et al. 2015; Cumming & Zambelli 2013). PE investment’s main aim is to tap investment opportunities with a primary focus to realize financial objectives. The investors contribute money to provide strategic as well as financial input and exit after making a return of 20–25% in 5–7 years. With one standard deviation (SD) increase in PE holdings returns increases by 4% every year (Dyck 2016). This is because of the superior due diligence by the PE investors and the ability to bridge information asymmetries. Zhang (2017) indicates that institutional requirements and firm-specific environment are important determinants of PE sentiment which helps to predict firm-level profitability and earnings potential in short term and long-term horizons. Eaton et al. (2020) discuss investor's interests and deals in the education sector and PE-backed schools get better government aid as well. A positive impact of PE on profitability, productivity, and return to investors is documented in several studies (Wright 2009a, b; Weir et al. 2015; Dhankar & Malik 2016). Firms that are backed by PE have better performance during the financial crisis of 2008–09 as compared to firms that do not have PE backing (Wilson 2012). Tykvova (2012) concludes that PE-backed companies do not suffer from high bankruptcy rates. Johan & Zhang (2020) and Harris et al. (2015), mention an overstatement of the performance of PE funds. For instance, Phalippou (2009) highlights that a significant part of the performance is determined by overstated valuations of current investments. Harris et.al (2014) discovers that PE funds have averaged 20% to 27% more than the USA S&P 500 index and more over 3% yearly over the whole life of a fund. Bernstein (2017) observes that PE-backed industries are more interested in f total production of investee firms and are less concerned with aggregate shocks. Huther (2019) learns that companies with General Partner friendly practices have more performance persistence and are associated with higher returns.

Several studies also signal the key determinants of firms where investments happen through the PE route. PE investment plays a significant role in a country's entrepreneurial performance too. Not ignoring the fact that differences exist in the amount of PE investments across economies. Several studies do deep to explore the possible reasons for it (Meyer 2006; Groh and Liechtenstein 2009, Black & Gilson 1998). Jeng and Wells (2000) also establish a methodology to unlock the major factors influencing PE investment. They in turn identify IPO to be one of the major determinants. These determinants might be country-specific or company-specific as well. For instance, Block (2019), suggests revenue growth as key criteria for a PE investor followed by the management team's record and profitability.

Another dimension of PE studies is concerning its impact on organizational commitment. There have been diverse reviews on the impact of PE investment and employees of the firm (Rider 2012; Bermiss et al. 2018; Clark 2013). Guery (2017) finds out that foreign investors provide employment insecurity compared to domestic investors. Gomez et al. (2020) observe that restructuring a buyout has a stronger and negative impact on the careers and human capital of employees. On the other hand, Davis et al. (2014) discover that in American firms, PE investments lead to a large increase in job creation. Bloom (2015) suggests that PE-backed firms have better management practices and even stronger monitoring practices.

The remaining part of the paper is planned as follows: Sect. 2 presents a research design including methodology covering inclusion criteria, bibliometric analysis under various heads. Section 3 presents the analysis and results of bibliometric analysis, Sect. 4, discusses the elements of a business model, based on the findings of the analysis and conclude the results, and Sect. 5 lists limitations and Sect. 6 highlighted the emerging themes and scope of future research in PE area.

2 Research methodology

The current study uses the method of scientific mapping and takes five steps into account (Fig. 1) suggested by Aria and Cucurullo (2017) and Firdaus et al. (2019). Stage 1 involves the study design, wherein research questions, keywords, and database selection are being done. In stage 2, data collection is done using the shortlisting criteria. After data collection from a database, bibliometric analysis is done using biblioshiny in this step, to assist in data interpretation (Jones and Gatrell 2014). The authors then move to the analysis of the result and its interpretation followed by possible future research agendas (Step 5). This technique is highly appreciated in identifying the research gap and is the most recommended technique used to synthesize existing studies.

Fig. 1
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Process of data screening and visualization

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2.1 Database, keywords and inclusion criteria

Data were extracted from the Science Collection Platform, a leading database for quotes and published articles, in August 2020 to reach the relevant information for the study. Web of Science is most suited for bibliometric analysis and includes publications from top-tier journals (Korom 2019). The data from the time 2002–2020 were analyzed. PE emerged in 1946 with the establishment of two venture capital firms-J.H. Whitney & Company and American Research and Development Corporation (ARDC). Between 1979 and 1980, there were around 200 leveraged buyout deals valued at more than $250 mn. With increased leveraged buyouts activity, there was the emergence of PE players in the industry. To attain appropriate search terms “private equity” or “private equity performance” was used to search the keywords, abstract and title yielding 568 papers. The research was refined only to English language articles resulting in 302 papers. To ensure relevance, full-length papers were accessed and some of the articles were extracted on relevant abstracts. To ensure the incorporation of relevant articles, the papers which focused on PE (concept, determination, measurement, and outcomes) were shortlisted for final analysis. The duplicate articles were removed.

2.2 Bibliometrics analysis

The information on WoS and Scopus journal databases (i.e., authors and co-authors, keywords, keywords, titles, journals, authors, institutions, abstracts, number of local and global citations) helps in performing the Scientometrics analysis by applying bibliometric technique (Martínez and Serve 2011; Cobo et al. 2011). From the early studies of Pritchard (1969) and Broadus (1987), the definition and methodology of bibliometric analysis have been provided. Heck and Bremser (1986) afterward add the analysis based on author and institution-related analysis. And recently the scientometric analysis has attained huge importance in the area of social sciences.

The current study has applied bibliometric mapping and network analysis which provides the understandings of published work in the area of PE, which is still and a grey area in research and to the best of our knowledge has not been reviewed earlier by any other author, Rey-Martí et. al (2016). Despite one of the important sources of finance for new and matured ventures, the topic is still having an infant research aspect. The authors tried to study the importance of PE in terms of capital source and how this source of capital can be used for sustainable development at a social and economic level.

The study begins with a description of the primary bibliometric statistics followed by a detailed analysis of two areas. The first being performance analysis which assesses different parameters (author, affiliations, countries, etc.) via bibliography indexes which are constructed based on and citations data and author-related data (Narin & Hamilton 1996). Secondly, it covers science mapping analysis (SMA) which draws its data from network mapping of the social and cognitive structure of research areas. The study examines the relationships at both macro and micro levels and suggesting the best possible directions for future research. The authors have used a workflow suggested by Aria and Cucurullo (2017) and Firdaus et al. (2019) (Fig. 2).

Fig. 2
figure 2

adapted from Aria and Cuccurullo (2017) and Firdaus et al. (2019)

Main methodology’s phases—

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Data analysis is done in two parts through an inductive analysis (Seuring and Müller 2008) wherein firstly a bibliometric analysis is done and in the second part, a network mapping is carried out. R package is statistical software that finely assimilates bibliometric analysis and graphic analysis through integrated data visualization tools using biblioshiny. It is precisely appropriate for science mapping during a time when a constant focus is empirical research and its producing large volumes of newer research streams (Aria and Cuccurullo 2017). Being an open free to access package R is easy to comprehend and apply. While using R for bibliometric analysis, the bibliometrics package Biblioshiny can be installed for bibliometric analysis. The analysis can be done on data extracted from popular databases such as WoS and Scopus. Therefore, in this study, biblioshiny by R is used to process data.

2.3 Objectives of the study

The study aims to present the current status of research in PE with the following research questions decoding the scope of the study.

  • RQ1. Examining the publication trends in PE concerning time, author, journals, affiliated countries, and institutions?

  • RQ2. Which are the prominent research areas and influential studies in PE?

  • RQ3. What all are the intellectual structure and transformative discoveries of PE research and how the topic has emerged as economic capital to social capital over the period?

  • RQ4. Which are the areas and gaps for future researchers to explore in private equity?

The bibliometric analysis would help to explore the above research questions deep-diving into the existent literature in the area of PE and help explore the existing gaps in the study.

3 Data analysis and findings

Description of main bibliometric statistics starts the analysis of bibliometric results. The further examination includes authors, indications, information, and the countries of research. Every category has been thoroughly analyzed using the following techniques: (1) Annual Publication trends, (2) Authors and their institutions, (3) leading journals, (4) topic dendrogram, (5) country collaboration map, and many more. Section-wise detailed analysis is provided in current subsections.

3.1 Year-wise publication on private equity papers

Figure 3 illustrates how the number of published articles progressed based on the WoS data on PE in the period 2002–2020. An increase has occurred in the number of publications from just a single article published in 2002 to 37 in the year 2019. There has been a steady increase in publications from 2012.

Fig. 3
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Annual Publication trend from 2002–2020 retrieved from Web of Science (WoS)

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One possible cause could be that a swelling number of researchers have grasped that PE has a broad dimension and its effects ripple into company performance and organizational structures. Another plausible reason could be several countries introducing policies backing the promotion of entrepreneurship (Tables 1 and 2).

Table 1 Basic information on published papers and their characteristics
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Table 2 Leading Journals publishing on private equity
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A descriptive analysis of the main information (Table 3) of data indicates that the average citations per document are 15.36 and the total number of single-authored texts is 55. It leads the authors to focus further analysis on citations and author-related information.

Table 3 Depiction of top 10 authors as per scholarly production
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3.2 Epistemological orientation

In early works, researchers tried to establish the nature of the study and consequently segregated it into a theoretical, prescriptive, or descriptive orientation (Barley, Meyer, & Gash 1988). The study uses this typology to answer the question of establishing the epistemological orientation. In this context, the study examines selected papers by digging into the abstract apart from the general document characteristics. After careful screening of abstracts, 6.3% of the studies were agreeably classified as theoretical exploratory as they were based on a discussion of existing literature and did not encompass any new empirical data or modeling. Up against it was found 24% of the studies were descriptive which largely reported some fact or an opinion. However, most studies conformed to the predictive nature which uses some data to accept or discard a hypothesis. It may be indicated here that PE publications are largely portioned between predictive and descriptive orientation.

3.3 Publication outlets

The table below presents a list of the most important journals publishing in the area of PE. The top six journals have contributed to 55.65% of the total articles. Journal of corporate finance is the most famous journal publishing 19 articles followed by the Journal of financial economics. PE is a preferred source of financing and justifies its consideration within the scope of these journals. In the sector of PE numerous journals have an A* and A ranking in Australian Business Deans Council (ABDC), which shows that in top-quality management journals the PE market is prominently positioned.

3.4 Authors and their affiliated institutions and countries

Based on their number of papers, the table displays the top writers. Mike Wright is at the top of the list with 23 publications followed by Kevin Amess with 8 articles and Josh Lerner with 7 articles. Steven Neil Kaplan received the highest number of citations ie. 936. Mike Wright and Kevin Amess are measured masters in the area of PE and have published widely in the area of PE, leveraged buyout, and performance. H-index depicts numerically the productivity of a researcher. An h- index of 14 depicts that the researcher has published at least 14 papers with 14 citations.

G index is calculated on the basis of the distribution of citations received in a publication by a researcher. In view of a number of publications placed in the lower order of citations obtained, the G-index is the only number with at least a G2 quote. Mike has a G index of 23 which implies the author has published at least 23 articles which in combination received 577 citations (Tables 4 and 5).

Table 4 Top Institutions publishing in private equity
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Table 5 Top Countries publishing in private equity
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The above table incorporates the top countries affiliated with authors who published in the area of PE, with the top three being the USA (96 papers), the United Kingdom (43 papers), and Germany (24 papers). This shows the research in PE is focused on the west part of the world. It shows that most of the research has been done in these three countries and there is a need for more studies to be conducted in other parts of the world. The developed nations have realized the importance of PE and are being accepted with time in emerging countries.

The results can be confirmed with the help of the above Fig. 4 as well. The United States of America is a developed country that has been welcoming to PE inflow and therefore research in PE concerning cash flows, leveraged buyouts and performance has been done. Europe, Germany, and the UK have published the maximum number of articles in PE followed by France. In BRIC countries, China has researched the area of PE. Emerging countries that need finance and development have still not covered research in the PE area. They need to realize the upcoming importance and engage in this scientific debate.

Fig. 4
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Source: Authors’ elaboration using Biblioshiny

Country scientific production of private equity studies.

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3.5 Country collaboration map

Figure 5 below displays the global collaborations. The blue colour on the map is an indication of the research cooperation between different countries. The pink borderline connecting the different states in the map exhibits the extent of collaboration among the authors in different parts of the world. It is interesting to notice that the countries having the highest possible number of PE publications are actively involved. Countries like the USA, UK are collaborating with China, Germany but as they are far from each other, thereby they have been unable to develop any theme. But the collaboration among different countries can help in market collaborations and policy sharing.

Fig. 5
figure 5

Source: Authors’ elaboration using Biblioshiny

Country collaboration map.

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3.5.1 Citation analysis

Citation counts decide the number of citations received by a document over some time. A frequently mentioned document is deemed more valuable and productive than the less cited ones. The best way to assess the worth of a research article is to use citation analysis. An article that has a large number of local citations is considered an important work in the area of PE. The observable gap in local and global citations signifies that PE has received interest from other disciplinary areas as well.

Table 6 shows the list of PE authors mentioned locally and globally from 2000 to 2020. Global citations investigate the frequency of a report, including research fields and fields, mentioned throughout all databases. The frequency of a paper cited in other publications in the article network is indicated in the local citations.

Table 6 Top citations based on global and local citation count
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Steven Neil Kaplan tops the list with 525 citations in 2005 and 262 citations in 2009 followed by Phalippou with 183 citations in 2009. Kaplan (2005, 2009) has the most influential articles with relevant research gaps for further research in the area of PE. It provides theoretical and empirical evidence on the impact of PE in enhancing the profitability of firms.

3.6 Keyword analysis

3.6.1 Thematic map

Cobo et al. (2011) discuss how to estimate and visualize the subject of a certain branch of research. A thematic map seems to be a very clear graphic and the topics are evaluated in a quadrant. Thematic map is framed on centrality(x-axis) and density(y-axis). The density is a measure of the development of the chosen theme and centrality measures the importance of the central theme. The thematic map has four parts. Themes that are on the lower left part of the map are declining or emerging themes. Such themes can either drop out from the research or can be developed by the researchers. The themes on the lower right part of the thematic map are basic schemes. There has been a lot of research carried out on these themes. The left upper part represents niche schemes that are developed but in isolation. The themes on the upper right part are developed. According to the map, there is a lot of research done in the area of performance and leveraged buyout in the PE domain. As "ownership" moves from emerging to basic it indicates there is scope for research in this area where 'family business' research can be done. Capital investments are a niche area that can be developed. Studies on PE finance affecting the investments and investment cashflow sensitivity can be done and compared between developed and developing countries (Fig. 6).

Fig. 6
figure 6

Source: Authors’ elaboration using Biblioshiny

Thematic map.

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Figure 7 depicts the word cloud which is framed from keyword plus. The leveraged buyout has the highest frequency in the literature on PE firms usually become part of boards and actively participate by managing reporting requirements. Thus, corporate governance and the impact of also gets is share of attention from PE studies. Management buyouts, venture capitalists, risk, and return are also some of the used keywords. PE studies have used management buyouts as an alternative source of financing and risk and return of a PE investment is important to know the possible impact of going for this particular method of financing.

Fig. 7
figure 7

Source: Authors’ elaboration using Biblioshiny

Word cloud of private equity studies.

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Similar results can be seen from the world tree (Fig. 8) as well. Performance is having the highest frequency followed by leveraged buyouts and impact. This indicates the PE literature has studies focused on the above areas. Performance is used in combination with most of the keywords that appear in the title of PE articles. The analyzed words stem from the titles of the paper in the PE area.

Fig. 8
figure 8

Source: Authors’ elaboration using Biblioshiny

Keyword analysis of private equity literature.

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From 2002–2015, several studies were conducted in the area of leveraged buyouts, agency costs, performance, information, etc. which led to several studies in allied areas. From 2016–2020, some studies discussed the relationship between governance and agency costs, leveraged buyouts and agency costs, syndicate effect of leveraged buyouts, etc.

The map (Fig. 9) shows the growth of words from 2007 when post the global financial crisis, PE became a preferred source of financing. It highlights the possible combination of keywords representing performance, leveraged buyout, and impact. The largest rectangle shows the dominant keyword also indicating the preference of researchers to conduct studies related to performance and leveraged buyouts.

Fig. 9
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Source: Authors’ elaboration using Biblioshiny

Word TreeMap.

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Word growth (Fig. 10) indicates the words used in journals dealing with PE and related issues. The distribution frequency of words indicates the words, their usage, and occurrences over the years. Immediately after 2009, there is an abrupt rise in studies on performance and this continues till 2014 after which the graph starts declining. The graph depicts the result of the Loess regression. The variables in Loess regression are the number of times the word is used and the publication time. This method leads to a better visual understanding (Jacoby 2000). Leveraged buyouts, firms, and ownership have been exhibiting a rising trend. Phalippou & Gottschalg (2009), Bruton et al. (2010), Harris (2014), Franzen (2012), Bernstein, et al., (2017) discussed the performance of PE firms from 2009 to 2014 post which there has been a decline in the frequency of keywords.

Fig. 10
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Source: Authors’ elaboration using Biblioshiny

Word growth.

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3.6.2 Dendrogram

The dendrogram of words (Fig. 11) is a depiction of the relationship between keywords that have been produced by hierarchical clustering. Andrews (2003) discussed that dendrogram not only indicates an exact association among clusters generated, but it also aims to evaluate the number of clusters to enable researchers to identify the key drivers amongst various studies.

Fig. 11
figure 11

Source: Authors’ elaboration using Biblioshiny

Dendrogram.

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The proportion of debt and equity in a company's capital structure and choice of right hedge funds provides compensation for the risk and return. The persistence in the performance of limited partners impacts the liquidity and cash flow in a deal. The second.

portion depicts how leveraged buyouts increase value creation, productivity, and innovation in firms. Management buyouts also impact the operating performance and growth and with more investment in research and development, the free cash flow increases. The reputation of venture capitalists and the industry they operate in impact the returns. Depending on the PE strategy of leveraged buyouts or management buyouts, there is an impact on employment, productivity, and governance. The clustered impact of hedge funds performance, venture capitalists, and the value creation and innovation by LBO affect the choice of the exit of the firm in terms of the initial public offer.

3.6.3 Trend topics over the years

In 2009, studies were focusing on management buyouts in examining managerial incentives for discretionary disclosure. Studies were finding the relationship between family firm buyouts, PE, and the strategic change they bring in (Fig. 12).

Fig. 12
figure 12

Source: Authors’ elaboration using Biblioshiny

Trend topics.

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As the field started progressing, studies examining the relationship between venture capitalists' reputation, post IPO performance, and corporate governance were conducted. From 2013–2105, studies examined the impact of governance and ownership on the return in PE. Several studies were conducted on leveraged buyouts, PE, and jobs. From 2015 onwards, there are studies examining pre and post-performance of PE-backed firms. Studies on PE and corporate governance; earnings quality of pe vs non-PE-backed firms were done. From 2017 onwards, there has been an upsurge in studies focussed on value creation and productivity increase with PE finance.

3.7 Co-citation analysis

Citing two research publications is defined as citing a new research paper together. This technique is used to locate the most important material and to comprehend the intellectual structure of research publications in bibliometric analysis.

3.7.1 Thematic categorization: Clustering

In a network diagrame, the nodes can be segregated into different groups. The item grouped in the same cluster has a common issue and is distinguished from the items in the other clusters. The forming of clusters helps to evaluate the co-citation network's theme analysis.

3.7.2 Content analysis

The content analysis follows the co-citation analysis of the 302 research papers included in the three clusters. After careful examination of the three clusters, a common theme was derived from them.

3.7.2.1 Cluster 1: Private equity efficiency and performance in Leveraged buyouts

PE efficiency and disciplinary effects of debt with better-aligned management perspectives lead to returns in a leveraged buyout (Liu 2014). Leveraged buyouts are a way of introducing PE financing in a firm (Kaplan & Stromberg 2009). Good bank relationships benefit LBO’s sponsored by PE firms to attain loans on favorable terms (Ivashina & Kovner 2011). The announcement of a leveraged buyout in deals has been associated with a significant positive stock market reaction (Yeh 2012). Some studies point out that due to an increase in the leverage of a firm, leveraged buyouts increase the chances of bankruptcy (Ayash & Rustad 2021). In European firms, buyouts have been found to have a positive impact on asset growth and have provided employment in the target firms (Scellato & Ughetto 2013). PE firms' reputation affects leveraged buyout financing structure as it reduces the cost of leveraged buyout debt (James 2010). Too many leveraged buyouts by PE firms entail risk and therefore regulatory safeguards are needed to protect the public interest (Palcic & Reeves 2013). Leveraged buyout transactions increase firms' bargaining power with their suppliers (Brown et al. 2009). In the USA, PE firms' control has exhibited an immediate decline in investment and lagged decline in growth (Ayash 2020). With the PE industry becoming mature and competitive, PE firms have started focussing on operational improvement and functioning with less leverage (Hung & Tsai 2017).

3.7.2.2 Cluster 2: Impact of private equity ownership and corporate governance on value creation and free cash flow of the firms

PE investment is linked with gains in performance. A good corporate governance structure with the involvement of PE has provided the incentive to reduce free cash flow and agency problems (Wright et al. 2009a, b). For value creation drivers in PE buyouts, one-third is contributed to the degree of leverage while the rest due to operational and market effect (Achleitner et al. 2010). PE has shown success due to the corporate governance advantage of PE over the public firm (Masulis & Thomas 2009). Investment size is a driver of size in PE with large PE firms making big investments and small nurturing start-ups (Humphery-Jenner 2012). PE investment entails general partner involvement who are ex-industry or ex-consultants. It leads to improvement in sales and operating margin and internal value creation (Acharya et al. 2013). Australia board structure has been found similar to USA and UK. Venture capitalists have been found to improve corporate governance by using their contracts to recruit independent directors with rich industry experience (Suchard 2009). The emerging agency theory literature focuses on the role of PE ownership as a key governance factor (Filatotchev & Wright 2011). PE companies having strong people management practices and monitoring management practices have shown better governance (Bloom et al. 2015).

3.7.2.3 Cluster 3: Relationship between private equity and hedge funds and IPO as the preferred exit route for the private equity investors.

PE and hedge funds are registered as Alternative investment funds. Category II of Alternative Investment Funds (AIF) regulation focuses on hedge funds and category III on the hedge funds which can invest directly in the stock and commodity markets. Before the 2008 financial crisis, there was a trend towards the alternative investment fund category for the convergence of hedge funds and PE which slowed post the crisis (Sadab 2009). European Union regularised the AIFs and used PE and hedge funds to exert an international influence and international developments for internal agenda (Ferran 2011). Comparing PE and hedge funds, PE funds create more shareholder value due to their long-term attachment to the companies (Mietzner & Schweizer 2014). PE firms provide liquidity benefits but face the same liquidity risk as hedge funds (Phalippou 2009). Examining the PE investors in UK and France, studies found concentrated ownership improves initial public offering (IPO) performance and the venture capitalists and business angels have different impacts on the performance (Bruton et al. 2010). The high amount of PE ownership is positively related to the retention of top employees, in an IPO in an emerging market (Hearn & Filatolchev 2019). Studies focusing on the choice of exit of firms like IPO and secondary buyout have been conducted for developing nations (Plagborg -Moller & Holm 2017). PE sponsors do not target their IPO’s in hot periods and rush their companies to premature IPO’s (Michala 2019). Therefore, the nucleus of clusters highlights the comparison of PE and hedge funds and IPO being the preferred exit route for investors. There are other exit routes available like trade sale, strategic sale, etc. which can be explored in future research for PE. Also, researchers can work in the area of comparing PE vs non-PE-backed IPO's. Studies on AIF regulations affecting PE-backed firms' performance in developed and developing countries can be conducted.

4 Discussions and concluding thoughts

PE is an alternative investment fund consisting of the finance which is not listed on a public stock exchange (Malik et al. 2020). Given that PE is a source of finance and revolves across a plethora of dimensions for a firm, this bibliometric analysis study is an endeavor to deliver the briefest retrospective on the dynamic nature of PE. This study would help academic researchers, policymakers, and regulators in knowing the details of PE and examining the important research areas convincing for the study. The number of studies has increased dramatically for a long time and the area is developing constantly. The analysis aims at tracking the developing trends in PE and covers the relationship between the main articles published in leading journals with significant impact factors over the previous twenty years. Although authors have discussed many diversified issues like performance, leveraged buyouts, free cashflows, exit routes of PE investors, sectors drawing maximum investment with the economic outcomes of PE firms, but still the topic is not yet matured. Around 70% of the studies have used a causal relationship between PE funds and performance on profitability and earning quality measures. The authors have tried to identify the gaps which are not yet being given attention in the area of PE literature. The current review would help the authors to estimate the influential work in the area of PE, affiliating countries, prolific authors, keywords, productive journals, and interrelationships in the study. Study in PE area is mainly found in the developed countries like UK and USA and is now increasing in the developing nations. PE investment in developing nations is observing the increasing trend and now its receiving attention in the capital market (Banerjee 2008). Divakaran et al. (2014) have discussed the status and problems why PE is low in developing countries as compared to their developed counterparts. Mike Wright, Imperial College, UK is an eminent contributor in the area of PE, and Steven Neil Kaplan, University of Chicago Booth School of Business, USA has received a maximum number of citations in this field. We found huge collaboration among the Authors from developed countries and there is a huge scope of collaboration for the author of developing countries. Through detailed analysis, it is clear that studies on PE and hedge funds, PE and performance, PE and leveraged buyouts, PE, and the initial public offer look scope for future research. Proposing to the existing literature is thoroughly reviewed, this seminal work extracts maximum valuable insights into PE, which has increasing the importance in the development of the growth of the countries. Amongst the multiple methods that exist to summarise vast information on scientific production, bibliometric analysis can present information precisely with a strong visual appeal. The study provides an overarching view of the studies in PE in the past decade in a structured manner, how networks among authors, their citations, collaborations, keywords combinations are created which eventually substitutes for an overall view of the areas where studies are still is few. The research work reveals a consistent deficiency in the PE literature, from developed to developing countries. As can be seen from the conceptual model in Fig. 13, a lot of research is required in the area of the employment effect of PE, sustainable PE investors, and choosing the right exit strategy for the investors. This study is a wake-up call for policymakers and regulators to frame policies to welcome more PE. The study identifies gaps and scope for future researchers to explore the research gaps mentioned in the study. PE is finance with huge importance for the development of the economic position of the countries and can guide them to become competitive and stable economies.

Fig. 13
figure 13

Source: Authors’ elaboration using Biblioshiny

Co-occurrence map of keywords.

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5 Limitations of the study

The current study also has some limitations. First, while the authors have endeavoured to ensure the search conditions cover the area, some of the studies may not be available due to the absence of the related terms, as the data for analyzed from Web of Science (WoS)/SSCI/SCI/ASCI indexed only. The data from different sources like Scopus, google scholar, and many others, might have different results (Zemigala 2019). Second, the period is limited from 2002–2020, this may result in absence of a few previous studies. Thirdly, the study is limited to scientific keywords, although we selected research papers from the WoS database using "private equity” or “private equity performance” combinations, the authors may have overlooked some words, resulting in the exclusion of some relevant papers. The study focuses on the broad picture in the area of private equity instead of a precise aspect.

6 Emerging themes and agenda for future research in the area of Private Equity

PE is a developing topic that has lured the consideration of researchers for few years. It is also attain a status of dominant topic for financial regulators and policymakers. PE has become an important component towards the area of equity research. The current literature has investigated into the concept of PE, its level across the world to improve the available financing for the companies This review contributes further towards PE in terms of unfolding literature in terms of various trends and themes putting forth the scholarly work from 2002–2019. However, the authors identify certain lapses in the research on PE recommending the scope of future research. This is a dedicated segment to extend work in the area of PE.

6.1 Impact of private equity on generation of corporate employment

The theme falls in the third cluster and there are comparatively fewer studies conducted in this area in the last decade. Studies have shown PE-backed buyouts creating value through long and short-term ownership and strategies with an emphasis on increased efficiency and growth (Bacon et al. 2008). Studies reveal that venture capital and PE financing have a positive influence on a single entity's business employment growth and net sales (Paglia & Harjoto 2014). In the UK, leveraged buyouts have observed a significant decline in employment in the acquired firm a year after investment (Goergen et al. 2011). But there is significant research exploring the effect of PE on the employment level of companies. The following research questions can be addressed by the researchers:

  • RQ4. Does PE investment imply better employment growth and compensation for the employees?

  • RQ5. What are the employment effects of a PE deal in developed vs developing countries?

  • RQ6. What are the country-specific effects of a PE fund on the employment practices of a firm?

The above questions would help answer significant challenges faced by employees. It would give a new perspective to the literature on PE on the country impact effect of funds and different strategies of developed vs developing countries.

6.2 Private equity exits: Analysing the divestment process

The literature on PE discusses its relationship with CFP but there are fewer studies on the exit strategies of PE investors. The type of exit depends on the financing stage, region of investments, type of industry, and type of PE funds (Annamalai & Deshmukh 2011). IPO as an exit strategy is preferable in the countries with a higher regulatory framework (Cumming et al. 2007). Portfolio firms have exhibited stronger corporate profitability after the investment of PE firms (Dong et al. 2020). The literature recognizes the following gaps to be researched upon:

  • RQ7. How does PE exit create value creation for portfolio companies?

  • RQ8. Is trade sale a better exit strategy than an initial public offer to overcome financial fragility during the crisis?

  • RQ9. How does an emerging market PE exit differ from a developed market?

  • Exploring the above questions would provide an insight into the importance of an exit strategy for the success of a PE deal.

6.3 Impact of sustainable private equity on CFP and risk mitigation of the portfolio firms

PE investors are on the path of being socially responsible investors. Studies have mostly focussed on the relationship between entrepreneurship and economic growth and very little has emphasized environmental quality (Nakamura 2019). Recently studies on entrepreneurship have focussed on sustainable and green entrepreneurship (Grinevic et al. 2019; Munoz & Cohen 2018). Importance of cleantech investing, socially responsible investing, and impact investing leads to sustainable investing. Environmentally benign technologies like water purification, alternative energy is the main focus of sustainable PE investors (Parker O’Rourke 2006). The sustainable investment comprises socially responsible investment (SRI), Economic social governance (ESG), and Impact investing. Though the researchers have to start investigating in this area, still there are a lot of gaps that need to be studied to make the literature on PE robust. Following research questions can be addressed by the scholars:

  • RQ10. What is the impact of ESG on PE finance for emerging countries?

  • RQ11. Are PE firms capable of creating value by including ESG criteria in their investment process?

  • RQ12. Are PE-backed firms socially more responsible? (Fig. 14).

Fig. 14
figure 14

Source: Authors’ elaboration based on current analysis

Proposed conceptual model for private equity and its emerging areas.

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The above gaps when addressed would help to find out how the PE companies have a growing and consequential influence on social and environmental outcomes.

An exhaustive content analysis of clusters and published papers is summarized as a theoretical framework. The conceptual model developed demonstrates the highly researched areas of PE being performance, leveraged buyouts, and corporate governance. Researchers have studied the pre and post effect of PE on the CFP of companies. Studies have focussed on the cash flow impact, R&D, efficiency, and source of innovation in the area of PE. According to the bibliometric analysis, there is a scope of research in the areas of PE and employment, choosing the right exit strategy to make maximum returns as well as being socially responsible investors. A sustainable investor invests for a social and economic return. Emerging markets like India are very less developed in the area of PE literature. There is a huge scope to dig deep in the Indian PE industry on a corporate level as well as an economic level. With tax incentives, fewer regulations, stable government Indian market is attracting foreign as well as domestic PE investors. Academic research in PE is in a nascent stage and the analysis tries its best to provide the researchers with research gaps to explore studies in the PE area.