This paper analyzes the capital structure of private asset managers in which the acquisition of nonperforming loans …

We analyze the implications of linking the compensation of fund managers to the return of their portfolio relative to …

. The model predicts that as competition increases, both loans and assets increase; however, the effect on the loans …-to-assets ratio is ambiguous. Similarly, as competition increases, the probability of bank failure can either increase or decrease. We …'' probability of failure is negatively and significantly related to measures of competition, and that the loan-to-asset ratio is …