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Coinvestment and risk taking in private equity funds

Bienz, Carsten; Thorburn, Karin; Walz, Uwe - 2016

Private equity fund managers are typically required to invest their own money alongside the fund. We examine how this coinvestment affects the acquisition strategy of leveraged buyout funds. In a simple model, where the investment and capital structure decisions are made simultaneously, we show...

Persistent link: https://www.econbiz.de/10011436066

Ownership, wealth, and risk taking : evidence on private equity fund managers

Bienz, Carsten; Thorburn, Karin S.; Walz, Uwe - 2020

We examine the incentive effects of private equity (PE) professionals' ownership in the funds they manage. In a simple model, we show that managers select less risky firms and use more debt financing the higher their ownership. We test these predictions for a sample of PE funds in Norway, where...

Persistent link: https://www.econbiz.de/10012303223

Do private equity funds benefit from their relationships with financial advisors in M&A transactions

Morkoetter, Stefan; Wetzer, Thomas - 2015

Financial advisors play an important role in M&A transactions. Private equity (PE) firms, in turn, are highly sought-after clients for financial advisors as they promise lucrative business due to their frequent engagements in acquisitions. We find that PE firms pay, on average, less for...

Persistent link: https://www.econbiz.de/10011345066

Berkshire versus KKR : Intermediary influence and competition

Cunningham, Lawrwence A. - 2015

Kathryn Judge of Columbia University documents how financial intermediaries persistently impose high fees compared to the value rendered, attributes this to political influence, and suggests countervailing policy strategies, including stoking competition and enhancing disclosure to reduce...

Persistent link: https://www.econbiz.de/10011492987

Sources of Value Gains in Minority Equity Investments by Private Equity Funds : Evidence from Block Share Acquisitions

Chen, Guojun - 2017

Using block share acquisitions made by private equity (PE) funds, we examine the sources of value gains in PE minority equity investments. We find that the targets in PE acquisitions, particularly poorly performing targets, targets with high R&D intensity, and targets whose boards have...

Persistent link: https://www.econbiz.de/10012974977

Do Private Equity Funds Always Pay Less? A Synergy-Related Explanation Based on Add-on Acquisitions

Morkoetter, Stefan - 2016

We assess the pricing of transactions undertaken by private equity (PE) funds in comparison to the transactions of strategic acquirers and sellers and focus on synergy gains as an explanatory factor. Controlling for company and deal characteristics, we show that PE funds pay 20% less, on...

Persistent link: https://www.econbiz.de/10013003165

Perverse Incentives of Special Purpose Acquisition Companies, the 'Poor Man’s Private Equity Funds'

Dimitrova, Lora - 2016

Special purpose acquisition companies (SPACs) are an alternative investment, structured as a one-shot private equity (PE) deal. Significant cross-sectional variation exists in SPACs' performance, which can be explained by the strong implicit incentives embedded in contracts. SPAC performance is...

Persistent link: https://www.econbiz.de/10013007985

Can private equity funds act as strategic buyers? : evidence from buy-and-build strategies

Bansraj, Dyaran S.; Smit, Han T. J.; Volosovych, Vadym - 2020

By holding assets longer and increasingly focusing on growth strategies private equity firms enter the territory of strategic buyers. In one such strategy, a private equity firm buys a company and then builds on that "platform" through add-on acquisitions. We ask whether such serial...

Persistent link: https://www.econbiz.de/10012241756

Buy low, sell high? : do private equity fund managers have market timing abilities?

Jenkinson, Tim; Morkoetter, Stefan; Wetzer, Thomas - 2018

When investors commit capital to a private equity fund, the money is not immediately invested but is called by the fund manager throughout an investment period of up to five years. This business model allows private equity fund managers to invest the committed capital at their own discretion,...

Persistent link: https://www.econbiz.de/10011906462

Index Fund and ETF Ownership and the German Market for Corporate Control

Dobmeier, Ludwig - 2019

If a bidder launches a takeover offer for a listed company being part of a stock market index, then index funds and …. This paper analyzes the impact of index fund and ETF ownership on the success of takeover offers in Germany. Based on a … sample of 323 takeover offers of publicly listed German companies between 2006 and 2018, we document a significant negative …

Persistent link: https://www.econbiz.de/10012864050

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