Buyout Funds

What are buyout funds, how are they run, and how do they create value for investors? What is the current state of the buyout industry, and how did fund managers deal with the adversities they faced during the financial crisis of 2007−2008? Which challenges await the industry in the future? This chapter attempts to answer these questions. To do so, the chapter explains the economic features and major value drivers of buyout funds. It also discusses how the recent financial crisis crippled these value drivers and how the subsequent regulatory scrutiny might have the potential to change the buyout industry in the future.