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 … risk decreases and leverage increases with the manager's ownership in the fund, but largely only when scaled with her …