Our Research Workshops on the first Wednesday of every month will feature presentations of new academic research. These will be held in an open “camera on” meeting format so participants can directly interact with the authors. We will observe Chatham House Rule and the meetings will not be recorded to encourage an open discussion.
Aug 5, 2026 – 11:00AM (ET)
Politicians, investors, and investment managers have begun advocating for the expansion of retail investor access to private markets, despite uncertain implications for individual financial opportunities and outcomes. We study the performance of private market investment vehicles which have recently become available to retail investors: closed-end funds of private funds (CE-FOPFs). In August of 2025, the SEC made accreditation requirements on CE-FOPFs optional. We provide the first empirical evidence on the characteristics and performance of these private-market-exposed securities. We show that there has been significant growth in the amount of capital allocated to CE-FOPFs recently, particularly those with a private equity focus, resulting in CE-FOPFs holding over $80 billion in net assets by the end of 2025. However, CE-FOPFs have underperformed public and private market benchmarks during our sample period. Finally, we document the emergence of new CE-FOPFs catering to retail investors since the change in regulatory stance by the SEC.
Authors: Andrew Glover, University of Washington; Oscar Halliwell, University of Washington; Rui Silva, University of Washington (presenting)
Sept 2, 2026 – 11:00AM (ET)
This paper examines how industry concentration evolves through changes in corporate ownership, with a focus on private equity. Drawing on ownership and financial data for over five million public and private firms in the United Kingdom from 2002 to 2021, we examine how ownership types reshape industry structure. We introduce a decomposition of the Herfindahl Index that separates ownership-driven consolidation from reallocation driven by firm growth and entry, and apply it separately to private equity–owned, listed, and non-listed firms. Ownership-driven consolidation is pervasive and mechanically increases concentration, while growth-driven reallocation typically reduces it, resulting in modest net changes. Private equity–owned and listed firms contribute similarly to consolidation, whereas non-listed firms act as a countervailing force through relative growth. Consolidation is more prevalent in markets experiencing declining markups, indicating that ownership reallocation often occurs under increasing competitive pressure. Reflecting this selection, consolidation is associated with lower industry-level markups, while firm-level markups do not increase systematically, suggesting that concentration changes primarily operate through reallocation and productivity rather than higher prices.
Authors: Dyaran Bansraj, Erasmus School of Economics (presenting); Per Strömberg, Stockholm School of Economics
(Paper)
July 8, 2026 – 11:00AM (ET)
Using proprietary data on U.S. venture capital (VC) fund distributions, I document that at least 56% of capital is returned to limited partners (LPs) in kind as publicly listed equity rather than cash. Distributions follow substantial price appreciation, reflecting both general partners’ (GPs) value-added activities and their ability to time exits. Distributed stocks experience a sharp, non-reversing price drop that modestly reduces LPs’ realized returns. Losses are smaller for distributions made by reputable VCs, not because they employ more LP-friendly distribution practices, but because they invest in companies with stronger post-distribution performance. The findings reveal a new agency friction: GPs report fund returns, and earn carried interest, using distribution marks that LPs cannot feasibly realize. However, a counterfactual analysis shows that prohibiting stock distributions would reduce LP returns even more, underscoring the trade-off LPs face.
Authors: Minmo Gahng, Cornell University (Presenting)
June 10, 2026 – 11:00AM (ET)
This paper provides the first systematic evidence on secondary markets for equity in VC-backed startups, a fast-growing segment of private capital markets. Using proprietary data from a large market maker, we show that shares often trade at a discount to prior venture capital valuations, with discounts narrowing as liquidity improves. Secondary prices predict future financing valuations and are partially incorporated into mutual fund valuations. By providing both liquidity and price discovery, secondary markets are becoming an integral part of private capital markets. Their importance is likely to grow if the trend of startups staying private longer continues as investors seek exposure to private markets.
Authors: Daniel Bias, Vanderbilt University; Johan Cassel, Vanderbilt University (presenting); Berk Sensoy, Vanderbilt University
May 6, 2026 – 11:00AM (ET)
This paper examines how private equity funds generate returns by separating performance into three components: selecting companies, timing exits and improving firms during ownership. Using data on thousands of buyout transactions over several decades, the study shows that these sources of performance differ across funds. Investment selection varies relatively little, while exit timing appears more systematic and potentially learnable. In contrast, operational improvement shows the greatest variation, suggesting that hands-on value creation is where firms differ most.
Authors: Victor Lyonnet, University of Michigan (Presenting); Reiner Braun, Technische Universität München; Mark Jansen, University of Utah; Constantine Yannelis, University of Cambridge
(Paper) & (Presentation)
Apr 1, 2026 – 11:00AM (ET)
Join us as professors Greg Brown & Christian Lundblad (UNC Kenan-Flagler Business School, IPC) share newly published results from IPC’s annual white paper focused on buyout fund exits and distributions. Specifically, we propose models that describe how much of the low distributions from funds since 2021 can be attributed to cyclical factors known prior to the current episode. Our evidence suggest that a large fraction of the decline in distributions is cyclical.
(Paper) & (Presentation)
Mar 4, 2026 – 11:00AM (ET)
Abstract: U.S. public pension funds increasingly face negative net operating cash flows as benefit payments exceed contributions. We study how these funds incorporate cash flows into their asset allocation and investment decisions using aggregate pension fund data and granular holdings data obtained through FOIA requests. While asset allocation models predict that investors should accommodate negative cash flows by adopting more conservative portfolios, we show empirically that target allocations are independent of cash flows. Instead, negative cash flows make pension funds predictable net sellers and liquidity demanders in financial markets. Pension funds accommodate predictable negative cash flows by selling both fixed income and equities, but they meet negative cash flow shocks primarily by liquidating equities. At the security level, pension funds sell across equities and do not follow a liquid-assets-first approach. Pension funds more exposed to alternatives rely disproportionately on equity sales to meet liquidity needs. These liquidity-driven equity sales occur even during periods of negative equity returns, which confirms that liquidity sales are separate from portfolio rebalancing. Our findings thus reject the view of pension funds as liquidity providers in financial markets.
Authors: Aleksandar Andonov, University of Amsterdam & CEPR (presenting); Kristy Jansen, USC Marshall School of Business & DNB; Joshua Rauh, Stanford GSB, Hoover Institution, & NBER
(Paper) & (Presentation)
Feb 4, 2026 – 11:00AM (ET)
In this month’s workshop, Borja Fernández Tamayo, PhD (SKEMA Business School & Unigestion SA) will present a popular paper from our recent Current Issues in Alternatives NYC Symposium.
Jan 7, 2026 – 11:00AM (ET)
Featuring two presentations of new research from our PERC November conference in Chapel Hill. Blake Jackson (University of Florida) will present “How do Barbarians Get to the Gates?” voted BEST PAPER by conference attendees. UNC’s Richard Maxwell will then present “Strategic Capital Deployment in Private Equity”.
(Presentation) & (Paper)
Abstract: We study the risk and return properties of private real estate, infrastructure, and natural resources funds using a large dataset on private real assets. Employing quarterly index series, we first develop an ARMA–Dimson unsmoothing procedure that restores realistic volatility and co-movement with liquid public benchmarks while preserving buy-and-hold performance. Second, at the fund-level, we find that core and generalist real estate funds, on average, underperform listed REITs over the full sample. However, in contrast to prior findings using data from before the Global Financial Crisis, performance since then has outstripped public markets, driven primarily by the strong performance of value-add and opportunistic funds. Private infrastructure funds have, on average, outperformed publicly traded infrastructure equities. Natural resources funds generally lag their public counterparts throughout our sample. Taken together, once smoothing is stripped out and returns are evaluated against appropriate public comparators, we find that manager, style, and vintage selection are central to realized outcomes.
Authors: Wendy Hu, MSCI; Christian Lundblad, UNC Kenan-Flagler Business School & Institute for Private Capital; Vedant Mozumdar, Institute for Private Capital (Presenting)
Nov 12, 2025 – 11:00AM (ET)
Abstract: Non-bank lending to small- and medium-sized firms—i.e., private credit—has exploded over the past two decades. To explore the rise in its popularity, we focus on Business Development Companies (BDCs), which comprise a large fraction of the total private debt market and for which we can observe detailed information on portfolio investments. Although many have noted that BDC investments substitute for bank financing in the wake of post-crisis credit tightening, BDCs operate in meaningfully different ways from traditional lenders. BDCs do not merely make alternative bank loans: they offer a complex combination of securities to companies, spanning the debt/equity spectrum. This allows private lenders to tailor contracts to the risk profiles of individual firms. The growth of the asset class is tied directly to this contractual complexity, which is associated with higher interest rates at the loan level but higher equity valuations and abnormal performance at the BDC-level. By blending lending with traditional private equity investments, the supply of capital is tailored to a growing retail investor segment.
Authors: David Robinson, Duke University and NBER; Melanie Wallskog, Duke University (presenting)
Oct 8, 2025 – 11:00AM (ET)
Abstract: Jensen’s (1989) theory of private equity leveraged buyouts (LBOs) predicts that firms in low-growth, high-cash situations – where agency costs are high, due to managers spending this cash unwisely – would benefit most from the LBO governance model. Using a proprietary dataset of 14,000 LBOs we show that Jensen’s prediction was right, and LBOs in ‘Jensen situations’ consistently outperform. We also find that the ‘Jensen LBO’ outperformance persisted over four decades since the original prediction. However, during the 1980s, when Jensen wrote his seminal piece, 90% of LBOs were prone to agency issues. In the 2010s, the share decreased to less than 50%, potentially explaining decreased PE outperformance in recent years.
Authors: Reiner Braun, Technical University of Munich; Tim Jenkinson, Said Business School, University of Oxford; Stefan Weik, University of St. Gallen (presenting)
Sept 3, 2025 – 11:00AM (ET)
Abstract: Ennis and Rasmussen (2025) analyze performance of private equity funds listed on the London Stock exchange and find that listed private equity (LPE) “has underperformed the stock market in risk-adjusted terms” over the 17 year period since the global financial crisis. We replicate their analysis using best practices in academic empirical finance and document substantially different results. Specifically, we find that over the last 10, 17, and 25 years, LPE has actually outperformed public markets. We document positive, but statistically insignificant, CAPM alphas and CAPM betas around 1.0 which are close to those documented by another recent large-sample academic study utilizing multiple estimation methods to estimate the risk of private equity funds. Finally, we document that adding LPE to diversified portfolios of public stocks and bonds would have typically increased the Sharpe Ratio of the portfolios. We provide our statistical code and dataset for others to examine.
Authors: Gregory Brown, UNC Kenan-Flagler Business School; William Volckmann, Institute for Private Capital
Aug 6, 2025 – 11:00AM (ET)
Abstract: Carried interest is a special, or disproportionate-to-ownership, allocation of profits to the general partner of a private equity or hedge fund partnership. Some commentators deride carried interest as a “loophole” that allows high-income taxpayers to reduce their taxes by improperly obtaining preferential, instead of ordinary, tax rates. In this paper, I provide three analyses that suggest these common concerns are misplaced. First, and contrary to concerns of impropriety, I show that the current tax treatment of carried interest is consistent with the basic principles of the tax system, including principles of equity and fairness. Relatedly, the taxation of carried interest in partnerships is identical to similar arrangements in corporations. Second, and contrary to concerns of reduced tax payments, I demonstrate that the current taxation of carried interest generally results in the U.S. government receiving more revenue than it would in absence of this special allocation. Third, I evaluate proposals to tax carried interest as ordinary income. Taxing carried interest as ordinary income may increase the tax rate on carried interest, but would also generate new deductions for the payment of carried interest that may partially or fully offset revenue raised by any tax rate increase, a fact often overlooked by commentators. In sum, the current taxation of carried interest is in line with the principles of the tax code and generates minimal, if any, revenue losses to the U.S. government and potentially increases revenue. Changes to the current tax treatment may induce economic distortions and reduce equity in the tax code. As such, commentators and politicians should refocus on more pressing and significant issues in the tax code.
Authors: Steven Utke, University of Connecticut (presenting)
July 16, 2025 – 11:00AM (ET)
Abstract: What drives racial diversity on startup boards? We provide the first evidence on this question by exploiting the demand shock from the 2020 George Floyd (GF) protests. Using facial recognition technology to measure race, we find that Black director appointments nearly doubled (from 1.6% to 3.1%) post-GF. Access to diverse candidates shaped startups’ ability to respond: appointments increased most in areas with more Black professionals and in executive and independent director roles, while venture capital firms showed no increase in Black appointees. Capital market incentives drove these responses: startups planning to raise capital in public or private markets were three times more likely to add Black directors. Following the DEI backlash, we find divergent career trajectories: Black directors appointed to public boards during 2020-2021 were significantly less likely to secure new board seats compared to those appointed before George Floyd, while startup directors showed no such negative pattern. This divergence reflects our finding that public firms rapidly increased first-time Black director appointments under intense scrutiny, whereas startups maintained more consistent appointment patterns throughout this period. Despite the sudden increase in demand, Black directors had comparable qualifications to other directors, and startups adding Black directors showed no change in performance. Our findings reveal that concentrated ownership, combined with institutional constraints, can entrench traditional networks that limit board diversity.
Authors: Johan Cassel, Vanderbilt University (presenting); James P. Weston, Rice University; Emmanuel Yimfor, Columbia University
June 4, 2025 – 11:00AM (ET)
Abstract: Private credit managers have the discretion and incentives to overstate values of their loan portfolios. To alleviate agency concerns that arise in pricing opacity, managers often delegate loan pricing to third-party valuation intermediaries. This paper studies how such intermediation affects valuation practices in private credit markets. We pair proprietary data with SEC filings to compare not only across managers, but also within their internal vs. external information environments. Third party pricing appears to be a widely used and effective tool that disciplines valuation practices. Creditors of the private credit managers themselves play a crucial role in enforcing valuation intermediation as a governance mechanism. However, the quality of their intermediation depends on informational inputs. During times of uncertainty, lead lenders receive better appraisals through incorporation of soft information from renegotiations. Overall, information asymmetry in lending relationships driven by the bespoke nature of direct lending appears to contribute to dispersion in reported marks, beyond often cited agency reasons.
Authors: Young Soo Jang, Pennsylvania State University, Smeal College of Business (Presenting);
Ginha Kim, University of Chicago Booth School of Business
May 7, 2025 – 11:00AM (ET)
Abstract: We characterize the factors common between public and private equity (PE) returns as well as the factors specific to private and public returns, respectively. Using a comprehensive dataset of PE funds and recent advances in PE fund returns nowcasting at high frequency and factor extraction in a grouped data setting, we show that, albeit over 90% of PE returns may be explained by factors common with the matched public equities, the remaining variation exhibits robust factors that are distinct to PE. These PE-specific factors significantly increase a portfolio’s Sharpe ratio through higher expected return and better diversification. The optimal allocation to PE is positive at the 95% confidence level–at 11 to 24% of risky portfolio, depending on the public equity portfolio characteristics-even after accounting for sampling error and imposing the no-shorting constraint within the PE portfolio. Additionally, we show that the two most commonly used datasets on PE fund returns have virtually identical common factors with public equities, but over half of their PE-specific variation is distinct from one another. Our approach ensures that the alpha we find cannot be mimicked by a tailored-enough portfolio of listed equities.
Authors: Eric Ghysels, UNC Kenan-Flagler Business School; Oleg Gredil, Tulane University, Freeman School of Business (presenting); Mirco Rubin, EDHEC Business School
April 2, 2025 – 11:00AM (ET)
Be among the first to hear findings from IPC’s newly released white paper, “Risk-Adjusted Performance of Private Funds: What Do We Know?”. In this session, Prof. Christian Lundblad from UNC Kenan-Flagler Business School will present what we believe represents the most exhaustive analysis of private fund returns to date.
Authors: Gregory Brown, UNC Kenan-Flagler Business School; Christian Lundblad, UNC Kenan-Flagler Business School (presenting); William Volckmann, Institute for Private Capital
March 5, 2025 – 11:00AM (ET)
Join us virtually for presentation and discussion around two of the most highly anticipated papers from our upcoming Spring Research Symposium. Hear directly from the authors on these pressing themes in Private Markets.
Paper #1: Selling to Yourself: Continuation Vehicles in Private Equity
WIP – Contact us to request presentation or paper
Abstract: This paper presents the first study of an emerging market trend: managers selling assets from one of their funds into a new continuation vehicle (CV) they manage, with existing limited partners being able to cash out or continue to hold. We comment on agency theories by analyzing data on continuation funds and transferred assets. CVs tend to be used by more successful funds and general partners and appear to contain higher quality assets, potentially as a response to asymmetric information challenges. Flexibility appears to be a key driver of limited partner investment decisions, with fund of funds being more likely to participate in CVs.
Authors: Rustam Abuzov, Darden Business School (presenting); Will Gornall, Saunder School of Business, University of BC; Ilya Strebulaev, Stanford University & NBER
Paper #2: Democratizing Private Markets: Private Equity Performance of Individual Investors
WIP – Contact us to request presentation or paper
Abstract: Using new data on wealthy U.S. households, we provide the first systematic study of private equity investments by individual investors. Contrary to concerns about adverse selection, we find that private equity investments by individual investors perform similarly to those of institutions and outperform public markets. We identify three innovations that enable individuals to invest in private equity: the proliferation of funds with low minimum commitments, pooling capital via advisors, and leveraging advisors’ networks to access fund managers. Our findings demonstrate how advisors and access to private equity funds can enhance household portfolio returns
Authors: Cynthia Balloch, London School of Economics; Federico Mainardi, Booth School of Business; Simon Oh, Columbia Business School; Petra Vokata, Fisher College of Business, Ohio State University and CEPR (presenting)
February 5, 2025 – 11:00AM (ET)
WIP – Contact us to request presentation or paper
In this workshop, Prof. Mike Ewens (Columbia Business School), will present preliminary research on the recent rapid growth in private funds including a description of fund terms and characteristics. The analysis also considers potential differences from traditional closed-end draw-down funds in underlying portfolios driven by differences in fund structure and incentives.
January 8, 2025 – 11:00AM (ET)
(Presentation) – WIP – Contact us to request paper
Abstract: Using proprietary client-specific fee data from private equity funds, we investigate the fee schedules of limited partners (LPs) when investing in private equity. Our analysis finds that management fees are almost half the level perceived by the market, and that economies-of-scale, though significant, fail to explain the majority of variance in management fee levels. Third-party expenses e.g. interest expenses, can reach significant levels. The accrual and distribution cycle of US-waterfall funds is also explored.
Authors: Oliver Bell, Leeds University Business School; Iain Clacher, Leeds University Business School; Tim Jenkinson, University of Oxford, Saïd Business School (presenting); Christopher Sier, ClearGlass Analytics
Dec 4, 2024 – 12:00PM (ET)
Abstract: Despite the remarkable growth of individual investors in private markets, little is known about their investment patterns. We test the impact of investor expertise on venture capital fund selection by conducting an experiment with limited partners. By fixing access to investment opportunities, we isolate fund selection behavior. We compare the selections of professional and individual investors. Both groups aim to select high performing funds but differ in their beliefs about which fund managers (GPs) deliver high returns. Professionals prefer GPs with strong past returns, while individuals favor GPs with elite educational backgrounds, but place less emphasis on past performance. Our estimates suggest that fund selection alone could explain 20% of the difference in returns between professionals and individuals.
Authors: Shane Miller, University of Michigan (presenting); Emmanuel Yimfor, Columbia University; Ye Zhang, Stockholm School of Economics
Nov 6, 2024 – 11:00AM (ET)
Abstract: PE managers often generate financial returns without selling the portfolio company by leveraging company assets or cash flows. This paper studies one such “leveraged payout” transaction, the dividend recapitalization (DR). While DRs increase deal returns, they reduce wages, pre-existing loan prices, and fund returns (possibly reflecting moral hazard via new fundraising), pointing to negative implications for employees, creditors, and investors.
Authors: Abhishek Bhardwaj, Tulane University; Abhinav Gupta, UNC Kenan-Flagler Business School; Sabrina T. Howell, NYU Stern & NBER (presenting)
Oct 2, 2024 – 11:00AM (ET)
WIP – Contact us to request presentation or paper
Abstract: This paper studies the growing importance of high-net-worth individuals (HNWI) in private capital markets, especially venture investments, and their role in explaining increasing inequality. Using novel data sources, we find that changes in U.S. business laws, which make it easier for small businesses to raise capital, played a major role in explaining the increasing participation of HNWI in private capital markets and in turn, higher wealth inequality in the U.S.
Authors: Ararat Gocmen, University College London Clara Martínez-Toledano, Imperial College London & CEPR; Vrinda Mittal, UNC Kenan-Flagler Business School (presenting)
Sept 4, 2024 – 11:00AM (ET)
Abstract: Carry is a performance-related payment made to private capital fund managers (general partners of limited partnerships). Using information on fund performance and key terms of fee structures, we can estimate whether a fund owes or paid some carry (is “in-the-carry”) and the total amount (paid and due). We find that as much as 70% of invested capital is in the carry, and funds focusing on Leveraged Buy-Outs and Secondaries are nearly all in the carry (83%, 91%). On aggregate, carry exceeds one trillion dollars (over the last 25 years). Three quarter of the overall carry goes to firms based in the U.S., but less than one third of the money invested comes from the U.S. These findings may contribute to global debates on the taxation of Carry and on new drivers of wealth inequalities.
Authors: Ludovic Phalippou, University of Oxford, Saïd Business School (presenting)
August 7, 2024 – 11:00AM (ET)
Private Debt vs. Bank Debt in Corporate Borrowing – (Presentation)
Abstract: This paper examines the interaction between private debt and bank debt in corporate borrowing. Combining administrative bank loan-level data with non-bank private debt deals, we document that about half of U.S. private debt borrowers also rely on bank loans. These dual borrowers are typically larger, riskier firms with fewer tangible assets, lower interest coverage ratios, and higher leverage. When co-financing the same borrowers, private debt lenders typically extend larger but relatively junior term loans with longer maturities and higher spreads, while banks provide more senior loans, typically in the form of credit lines. Once a bank borrower accesses private debt, it often obtains additional bank credit but at significantly higher spreads. During times of market-wide distress, a borrower’s reliance on private debt is associated with increased drawdowns and higher default risk of bank credit lines. Our findings suggest that while private debt substitutes for relatively riskier bank term loans, it complements bank credit lines. However, this complementarity may also impose costly externalities on bank loans by exacerbating their drawdown risk.
Authors: Sharjil Haque, Board of Governors of the Federal Reserve System (presenting); Simon Mayer, Carnegie Mellon University; Irina Stefanescu, Board of Governors of the Federal Reserve System
July 10, 2024
Are Some Angels Better Than Others? – (Presentation)
Abstract: This paper explores the tremendous variation in investment performance of angel investors. The returns are highly skewed: Despite the massive losses incurred in most investments, the mean return is twice the invested capital. Investor fixed effects explain far more of the total variation in angel performance than any collection of observable factors. “Better angels” do not earn higher returns by avoiding left-tail realizations as much as they do by achieving extreme right-tail outcomes. As explanations for the performance differences, we contrast better access to deal flow with better deal selection and find that industry-specific knowledge along with deal-selection skill is important.
Authors: Johan Karlsen, Norwegian School of Economics; Katja Kisseleva, Frankfurt School of Finance & Management (presenting); Aksel Mjøs, Norwegian School of Economics; David Robinson, Duke Fuqua School of Business
Interim Valuations, Predictability, and Outcomes in Private Equity – (Presentation)
Abstract: Using a novel dataset of U.S. buyout and VC investments, we study the informativeness of managers’ interim valuation reports of portfolio companies on final outcomes. We find that when investors assess the performance of individual portfolio companies, they can do better than just relying on the most recent reported valuation. The history of reported valuations is informative as well. Particularly for buyout funds, portfolio company investments with greater past staleness or more frequent markdowns tend to perform more poorly in the future than other investments. Moreover, investments with larger reported interim marks tend to have lower future returns. That is, past reported returns negatively predict future realized returns. Based on this predictability, the combined knowledge over interim multiple, past staleness, and past markdown frequency can help predict whether an investment will end up in the left or right tail of all investments. These predictions are informative as early as the first year of the investment.
Authors: Ege Y. Ercan, Stanford Graduate School of Business (presenting); Steven N. Kaplan, University of Chicago, Booth School of Business; Ilya A. Strebulaev, Stanford Graduate School of Business
June 5, 2024
Risk-Adjusting the Returns to Private Debt Funds – (Presentation)
Abstract: Private debt funds are the fastest growing segment of the private capital market. We evaluate their risk-adjusted returns, applying a cash-flow based method to form a replicating portfolio that mimics their risk profiles. Using both equity and debt benchmarks to measure risk, a typical private debt fund produces an insignificant abnormal return to its investors. However, gross-of-fee abnormal returns are positive, and using only debt benchmarks also leads to positive abnormal returns as funds contain equity risks. The rates at which private debt funds lend appear to be high enough to offset the funds’ fees and risks, but not high enough to exceed both their fees and investors’ risk-adjusted rates of return.
Authors: Isil Erel, The Ohio State University, NBER, and ECGI; Thomas Flanagan, The Ohio State University; Michael Weisbach, The Ohio State University, NBER, and ECGI (Presenting)
Undervaluation Induced LBOs – (Presentation)
Abstract: This paper shows that market timing drives private equity activity. Using mutual fund fire sales as a source of target undervaluation, we show that both public-toprivate and private-to-private deals are more common following a fire sale. Since fire sales are unrelated to firm fundamentals, we use this setting to provide causal evidence on the effects of private equity ownership on targets’ characteristics.
Authors: Dyaran S. Bansraj, City, University of London, Bayes Business School (Presenting); Aneel Keswani, City, University of London, Bayes Business School; Per Strömberg, Swedish House of Finance and Stockholm School of Economics; Francisco Urzúa I., City, University of London, Bayes Business School