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Limited partner performance and the maturing of the private equity industry

Sensoy, Berk A.; Wang, Yingdi; Weisbach, Michael S. - 2013

We evaluate the performance of limited partners' (LPs) private equity investments over time. Using a sample of 14,380 investments by 1,852 LPs in 1,250 buyout and venture funds started between 1991 and 2006, we find that the superior performance of endowment investors in the 1991-1998 period,...

Persistent link: https://www.econbiz.de/10009724586

Is sell-side research more valuable in bad times?

Loh, Roger K.; Stulz, René M. - 2013

Because uncertainty is high in bad times, investors find it harder to assess firm prospects and, hence, should value analyst output more. However, higher uncertainty makes analysts' tasks harder so it is unclear if analyst output is more valuable in bad times. We find that, in bad times, analyst...

Persistent link: https://www.econbiz.de/10010227721

The quiet run of 2011 : money market funds and the European debt crisis

Chernenko, Sergey; Sunderam, Adi - 2012

banks suffered significant outflows between June and August 2011. Due to credit market frictions, these outflows have … greater exposure to Eurozone banks decrease their holdings more than other funds. We show that relationships are important in …

Persistent link: https://www.econbiz.de/10009507044

Policy intervention in debt renegotiation : evidence from the home affordable modification program

Agarwal, Sumit; Amromin, Gene; Ben-David, Itzhak; … - 2012

We evaluate the effects of the 2009 Home Affordable Modification Program (HAMP) that provided intermediaries with sizeable financial incentives to renegotiate mortgages. HAMP increased intensity of renegotiations and prevented substantial number of foreclosures but reached just one-third of its...

Persistent link: https://www.econbiz.de/10009697769

Do loan officers' incentives lead to lax lending standards?

Agarwal, Sumit; Ben-David, Itzhak - 2012

We study a controlled experiment in which a bank's loan officers were incentivized based on originated loan volume to encourage prospecting for new business. While treated loan officers did attract new applications, both extensive and intensive margins of loan origination expanded ( 31% new...

Persistent link: https://www.econbiz.de/10009625941

Second liens and the holdup problem in mortgage renegotiation

Agarwal, Sumit; Amromin, Gene; Ben-David, Itzhak; … - 2014

When borrowers are delinquent, senior debtholders prefer liquidation whereas junior debtholders prefer to maintain their option value by delaying resolution or modifying the loan. In the mortgage market, a conflict of interest (“holdup”) arises when servicers of securitized senior liens are...

Persistent link: https://www.econbiz.de/10010353293

Why do banks practice regulatory arbitrage? : evidence from usage of trust preferred securities

Boyson, Nicole M.; Fahlenbrach, Rüdiger; Stulz, René M. - 2014

We investigate why only some banks use regulatory arbitrage. We predict that banks wanting to be riskier than allowed … by capital regulations (constrained banks) use regulatory arbitrage while others do not. We find support for this … hypothesis using trust preferred securities (TPS) issuance, a form of regulatory arbitrage available to almost all U.S. banks …

Persistent link: https://www.econbiz.de/10010353295

Why high leverage is optimal for banks

DeAngelo, Harry; Stulz, René M. - 2013 - Rev. May 29, 2013

Liquidity production is a central function of banks. High leverage is optimal for banks in a model that has just enough … frictions for banks to have a meaningful role in liquid-claim production. The model has a market premium for (socially valuable … premium, banks with risky assets use risk management to maximize their capacity to include such debt in the capital structure …

Persistent link: https://www.econbiz.de/10009782420

Access to capital, investment, and the financial crisis

Kahle, Kathleen M.; Stulz, René M. - 2012

During the financial crisis, corporate borrowing and capital expenditures fall sharply. Most existing research links the two phenomena by arguing that a shock to bank lending (or more generally to the corporate credit supply) caused a reduction in capital expenditures. The economic significance...

Persistent link: https://www.econbiz.de/10009507046