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Special purpose acquisition companies (SPACs) are an alternative investment, structured as a one-shot private equity (PE) deal. Significant cross-sectional variation exists in SPACs' performance, which can be explained by the strong implicit incentives embedded in contracts. SPAC performance is...
Persistent link: https://www.econbiz.de/10013007985
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 predictions for a sample of PE funds in Norway, where...
Persistent link: https://www.econbiz.de/10012303223
When investors commit capital to a private equity fund, the money is not immediately invested but is called by the fund manager throughout an investment period of up to five years. This business model allows private equity fund managers to invest the committed capital at their own discretion,...
Persistent link: https://www.econbiz.de/10011906462
Kathryn Judge of Columbia University documents how financial intermediaries persistently impose high fees compared to the value rendered, attributes this to political influence, and suggests countervailing policy strategies, including stoking competition and enhancing disclosure to reduce...
Persistent link: https://www.econbiz.de/10011492987
This paper analyzes the economics of the private equity fund compensation. We build a novel model to estimate the expected revenue to fund managers as a function of their investor contracts. In particular, we evaluate the present value of the fair-value test (FVT) carried interest scheme, which...
Persistent link: https://www.econbiz.de/10013099241
This paper analyzes the economics of the private equity fund compensation. We build a novel model to estimate the expected revenue to fund managers as a function of their investor contracts. In particular, we evaluate the present value of the fair-value test (FVT) carried interest scheme, which...
Persistent link: https://www.econbiz.de/10013037597
Persistent link: https://www.econbiz.de/10003758625
Persistent link: https://www.econbiz.de/10012437934
Während der letzten Jahre ist die Private-Equity-Industrie, verbunden mit steigenden Fonds- und Transaktionsgrößen, rasant gewachsen. Dies stellt Fondsmanager hinsichtlich der zu erzielenden Rendite vor ganz neue Herausforderungen. Im Rahmen einer breit angelegten empirischen Untersuchung...
Persistent link: https://www.econbiz.de/10014015219
We review the theory and evidence on venture capital (VC) and other private equity: why professional private equity exists, what private equity managers do with their portfolio companies, what returns they earn, who earns more and why, what determines the design of contracts signed between (i)...
Persistent link: https://www.econbiz.de/10013135193