Working Paper: NBER ID: w14207
Authors: Steven N. Kaplan; Per Strömberg
Abstract: We describe and present time series evidence on the leveraged buyout / private equity industry, both firms and transactions. We discuss the existing empirical evidence on the economics of the firms and transactions. We consider similarities and differences between the recent private equity wave and the wave of the 1980s. Finally, we speculate on what the evidence implies for the future of private equity.
Keywords: Private Equity; Leveraged Buyouts; Corporate Governance; Market Timing
JEL Codes: G3; G34
Edges that are evidenced by causal inference methods are in orange, and the rest are in light blue.
| Cause | Effect |
|---|---|
| private equity activity (G24) | economic value (D46) |
| private equity activity (G24) | capital structure (G32) |
| private equity activity (G24) | management incentives (M52) |
| management ownership stakes (G32) | short-term manipulation (E71) |
| private equity firms (G24) | market mispricing (G19) |
| market mispricing (G19) | higher returns (G12) |
| favorable credit conditions (G21) | market mispricing (G19) |