We contribute to the debate about the future of capital markets and corporate finance, which has ensued against the background of a significant boom in private markets and a corresponding decline in the number of firms and the amount of capital raised in public markets in the US and Europe. Our...

This paper analyses the stochastic behaviour of Private Equity returns (a measure of profitability) applying fractional integration methods to an extensive dataset including quarterly data spanning the last four decades for various geographical areas (US, Europe, Asia/Pacific, the Rest of the...

The effects of private equity buyouts on employment, productivity, and job reallocation vary tremendously with macroeconomic and credit conditions, across private equity groups, and by type of buyout. We reach this conclusion by examining the most extensive database of U.S. buyouts ever...

Global consensus is growing on the contribution that corporations and finance must make towards the net-zero transition in line with the Paris Agreement goals. However, most efforts in legislative instruments as well as shareholder or stakeholder initiatives have ultimately focused on public...

This paper studies the difference between startup investments by private equity funds (buyout funds; PE) and venture capital funds (VC). PEs, which have traditionally invested in mature companies, have been increasingly investing in later-stage startups in recent years. Based on Crunchbase's...

Equity funding is a widespread financing form that often accompanies the life cycle of innovative ventures from initial stages until maturity. From the perspective of investors, the event defining the success of an equity financing operation is the exit, which represents the moment when they...

This paper examines the performance of 538 sovereign wealth fund (SWF) investments into venture capital, private equity, and real asset funds ("alternative asset funds") from 52 countries around the world over the years 1995-2020. The data indicate SWFs are significantly slower to fully...

We contribute to the debate about the future of capital markets and corporate finance, which has ensued against the background of a significant boom in private markets and a corresponding decline in the number of firms and the amount of capital raised in public markets in the US and Europe. Our...

Private equity grows from strength-to-strength, with 2021 being a record year for private equity buyouts. The success of private equity is dependent upon making large returns on investment. Partly, success is derived from growing acquired companies, making acquired companies more efficient, and...

I investigate whether and how private equity fund managers (GPs) inflate their interim fund valuations (net asset values, or NAVs) during fundraising periods. Specifically, I study the extent to which the GPs inflate NAVs by managing valuation assumptions (e.g., valuation multiples), influencing...

We survey the literature on the private equity partnership arrangement from the perspective of an outside investor (limited partner). We examine how the partnership arrangement fits into a broader portfolio of investments, and we consider the methods and difficulties in performance measurement,...

The abnormal decline in the number of US public firms is often blamed on mergers, private equity, and stock market regulations. We compare and quantify the effects of these channels in a unified framework. In the US, an extra 100 mergers is associated with 22.01 additional missing public firms,...

Since the last global financial crisis, private equity activities have increased again in Germany. This article provides an overview of developments between 2012 and 2018 from an employee perspective. It shows, among other things, the volume and sectoral focus of company takeovers, the new...

Local daily newspapers historically played an important role in U.S. democracy by providing citizens with information about local policy issues. In recent decades, local newspapers have struggled to compete with new online platforms. In the first study of private equity (PE) in a struggling...

We present a new approach for estimating private equity returns using secondary market prices for entrepreneurial business credit card securitizations. We show that the market requires a significantly higher premium for entrepreneurial credit risk than for household credit risk. Entrepreneurial...

We survey the academic literature about the impact of private equity investments in the broader economy. Private equity fund managers respond to high-powered incentives and seek to maximize shareholder values via a variety of channels. The literature identifies two broad approaches to value...

Does performance volatility enable organizations to increase their rank relative to their rivals? While prior research has argued that rankings are derived from organizations’ realized (past) performance, under quality uncertainty, volatility could also confer advantages for increasing rank....

Studies of the effects of private equity in the United States have shown that the short-term, return-oriented business model can put a strain on industrial relations between employers and employees. This is similarly assumed to be the case for the coordinated market economy in Germany. Firstly,...

This paper presents new evidence on the economic role of private equity buyouts by exploiting the staggered adoption of the constructive fraud provision by U.S. state courts. The law unintentionally shifts the credit default risk borne by existing unsecured creditors of the buyout target to the...

We review the scant academic literature on the use of leverage in institutional private equity real estate (PERE) investments and summarize a number of stylized facts. The bulk of available evidence supports the view that leverage, as used by high-risk PERE funds, does not adequately compensate...

This paper examines the performance effects arising from IPO firms retaining their existing bank as a lead manager together with the effects of foreign and domestic lead managers, corporate insiders and private equity investors across West Africa. Using a unique and comprehensive sample of 37...

We integrate the institutional perspective with research on the governance role of private equity firms in an investigation of Founder-CEO successions in Initial Public Offerings (IPOs) in emerging markets. Using a unique, hand-collected and comprehensive sample of 191 firms having undertaken...

Venture Capital and Private Equity backing prior to Initial Public Offerings influence the listed firm's financial policies. We find that, relative to the mean, VC-backed firms have 18.89% higher cash flow volatility, 23.12% lower leverage and a 36.76% higher likelihood to follow a zero-leverage...

The amount of funds committed to private equity sponsors that are left uninvested (called dry powder) has raised numerous concerns from the public. We model the fee collection of private equity sponsors and show that funds tend to underlever future deals when they accumulate substantial amounts...

Private equity (PE) funds are increasingly important to the economy and now dominate capital markets (e.g., capital formation). However, lack of understanding of PE funds among accounting academics currently prevents accounting research in this area. In this paper, we first describe the PE fund...

Existing stochastic discount factor methods for the valuation of private equity funds result in unrealistic time discounting. We propose and evaluate a modified method. Valuation has a risk neutral component plus a risk adjustment, and we fix the risk-neutral component by constraining the...