This research investigates the performance and sources of value gains of acquisitions by private equity (PE) fund investors using a sample of Korean listed firms acquired in the period from 2007 to 2017. Our sample includes both full acquisitions in which acquirers obtain the largest target ownership and block acquisitions in which acquirers purchase at least 5% of target shares without becoming its largest shareholder. We find significant and positive stock market reactions to both types of acquisitions by PE funds. We also find operating performance improvement following full acquisitions by PE funds. Moreover, the improved post-acquisition performance is more pronounced in PE fund targets that appoint new outside directors or those with finance experiences after full acquisitions. These results suggest that acquisitions by PE funds create value for shareholders mainly by governance and operational engineering and this value enhancement is more evident when PE funds obtain full controls over acquisition targets.