Private equity firms that are affiliated with banks have become major players in the leveraged buyout (LBO) market, raising billions of dollars in funds. In this paper, I investigate value creation of these LBOs through operating performance, leverage, and pricing. I find that bank-affiliated...

We examine changes to the products of public target firms after LBO using a novel dataset of firm products. We find that private equity funds cut target firms' new products after LBO, especially when there is less room to improve the target firm's performance through financial engineering....

The high internal rates of return sought by private equity funds are highly sensitive to portfolio company holding periods. We examine the determinants of holding periods for a sample of European buyouts from 2000 to 2015. Our results establish that the average holding period has lengthened to...

Private equity (PE) firms reduce product commercialization in their Leveraged Buyout (LBO) investments. This reduction is associated with a product focus in the product commercialization strategy of the LBO. Using a sample of LBOs against a control sample of firms that failed to close the LBO...

A number of private equity (PE) fund management firms (GPs) have sought listings on public stock exchanges; also, investors, regulators, and PE firms, are showing interest in permanent PE investment capital raised on public markets. However concerns have been expressed that both of these...

Special Purpose Acquisition Companies (“SPACs”) are shell companies formed for the purpose of acquiring an existing operating company. A typical characteristic of a SPAC is that it has no specific business plan at the time of establishment or that it is still unclear of its target company. A...

This paper explores how diversity among lead partner teams (LPTs) of private equity (PE) funds affects buyout performance. We argue that there is a trade-off between the “bright side” of diversity, i.e., improved decision-making due to a broader set of perspectives, and the “dark side”,...

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...

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...

The U.S. entrepreneurial finance market has changed dramatically over the last two decades. Entrepreneurs raising their first round of venture capital retain 30% more equity in their firm and are more likely to control their board of directors. Late-stage startups are raising larger amounts of...