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 study the impact of PE firm and buyout characteristics on default probability employing a Cox proportional hazards model to a global sample of 5,093 buyouts between 1997 and 2012. Our results indicate that investments of generalists have lower default probability than those of specialists....