More generally, private equity is also helpful in other corporate transitions, such as generational change, management buy-outs, crises and restructuring. The expansion of the stock exchange and of specialized intermediaries can also be fostered by an enhanced presence of institutional investors, pension funds above all.
In the countries where pension funds play a significant role, even relatively small firms tend to seek stock exchange listing. Institutional investors play an active role as minority shareholders, monitoring management’s performance. They reduce informational asymmetries and increase the volume of resources available on the market to finance enterprises.