On Secondary Buyouts
Informazioni aggiuntive
Autori
Degeorge F.,
Martin J.,
Phalippou L.
Tipo
Articolo pubblicato in rivista scientifica
Anno
2016
Lingua
Inglese
Abstract
Private equity firms increasingly sell companies to each other in secondary buyouts (SBOs), raising concerns which we examine using novel datasets. Our evidence paints a nuanced picture. SBOs underperform and destroy value for investors when they are made by buyers under pressure to spend. Investors then reduce their capital allocation to the firms doing those transactions. But not all SBOs are money-burning devices. SBOs made under no pressure to spend perform as well as other buyouts. When buyer and seller have complementary skill sets, SBOs outperform other buyouts. Investors do not pay higher total transaction costs as a result of SBOs, even if they have a stake in both the buying fund and the selling fund.
Rivista
Journal of Financial Economics
Pagina inizio
124
Pagina fine
145
Parole chiave
Private equity, buyouts, performance, secondary buyouts
