Loading...
Please wait, while we are loading the content...
Similar Documents
Leveraged Buyouts and Private Equity (2009)
| Content Provider | CiteSeerX |
|---|---|
| Author | Kaplan, Steven Kaplan, Steven N. |
| Abstract | I n a leveraged buyout, a company is acquired by a specialized investment firmusing a relatively small portion of equity and a relatively large portion ofoutside debt financing. The leveraged buyout investment firms today refer to themselves (and are generally referred to) as private equity firms. In a typical leveraged buyout transaction, the private equity firm buys majority control of an existing or mature firm. This arrangement is distinct from venture capital firms that typically invest in young or emerging companies, and typically do not obtain majority control. In this paper, we focus specifically on private equity firms and the leveraged buyouts in which they invest, and we will use the terms private equity and leveraged buyout interchangeably. Leveraged buyouts first emerged as an important phenomenon in the 1980s. As leveraged buyout activity increased in that decade, Jensen (1989) predicted that the leveraged buyout organizations would eventually become the dominant corporate organizational form. He argued that the private equity firm itself combined concentrated ownership stakes in its portfolio companies, high-powered incentives for the private equity firm professionals, and a lean, efficient organization with minimal overhead costs. The private equity firm then |
| File Format | |
| Journal | JOURNAL OF ECONOMIC PERSPECTIVES |
| Journal | Journal of Economic Perspectives |
| Publisher Date | 2009-01-01 |
| Access Restriction | Open |
| Subject Keyword | Term Private Equity Specialized Investment Minimal Overhead Cost High-powered Incentive Dominant Corporate Organizational Form Concentrated Ownership Stake Efficient Organization Debt Financing Leveraged Buyout Organization Leveraged Buyout Activity Venture Capital Firm Small Portion Private Equity Important Phenomenon Leveraged Buyout Investment Firm Today Majority Control Private Equity Firm Professional Private Equity Firm Portfolio Company Leveraged Buyout Typical Leveraged Buyout Transaction Large Portion Mature Firm |
| Content Type | Text |
| Resource Type | Article |
