This article aims to analyze the evolution of private equity over the last decade in terms of valuation (asset prices), determinants of private equity returns and the role that leverage and corporate governance plays in the success of private equity. The years 2005-2007 were characterized by a...

I explain the standard carried interest contract as a mechanism to induce incentive compatible fund leverage while also satisfying LP return objectives. Fee, leverage and target return data from private equity real estate (PERE) funds are used to calibrate the model. Steps in the modeling...

A subscription line of credit (SLC) is debt issued to a private equity fund and used on a continuing basis. Using new data on U.S. buyout funds, we show that when funds use subscription lines of credit they call less capital. We find that funds using SLCs have substantial distortions in...

Over the last two decades, the number (enterprise value) of leveraged buyout transactions involving privately held targets totals more than 10,000 (over $850 billion), accounting for 46% (21%) of the worldwide leveraged buyout market. Yet the vast majority of academic studies focus on the...

In this paper we address the magnitude of debt-related tax shields employing a proprietary data set of 56 German leveraged buyouts (LBOs) completed between 1997 and 2011. In particular we examine the relevance and performance contribution of tax shields under different financing policies, and...

This paper investigates the relationship between leverage and returns in private equity buyout transactions. In contrast to the predictions of traditional capital structure theory, we find that transactions financed with large amounts of debt are associated higher transaction prices and lower...

We survey 79 private equity (PE) investors with combined assets under management of more than $750 billion about their practices in firm valuation, capital structure, governance, and value creation. Investors rely primarily on internal rates of return and multiples to evaluate investments. Their...

This paper attempts to assist fellow leveraged buyout researchers understand nuanced details of corporate finance and leveraged buyouts, in particular. Given Haque, Jang, and Mayer (2022) is produced by esteemed colleagues at prestigious intuitions (Board of Governors of the Federal Reserve...

This article aims to analyse the evolution over the recent years of LBO funds, in terms of valuation (asset prices) and the role that leverage and corporate governance played in its evolution.Leverage is one of the positive factors that is supposed to contribute to the success of private equity,...

This paper studies whether debt renegotiation mitigates debt overhang and improves investment efficiency. Using mergers between lenders participated in the same syndicated loans as natural experiments that exogenously reduce the number of lenders and thus make renegotiation easier, I find that...