
Contents
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Introduction Introduction
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Private Equity in Theory Private Equity in Theory
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The LBO and Private Equity Involvement The LBO and Private Equity Involvement
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The LBO Governance Structure: Aligning Incentives The LBO Governance Structure: Aligning Incentives
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Management Equity Holdings Management Equity Holdings
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Debt Bonding Debt Bonding
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Monitoring by Private Equity Firms Monitoring by Private Equity Firms
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Entrepreneurship and Governance Entrepreneurship and Governance
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Heterogeneity of LBO Types Heterogeneity of LBO Types
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Public-to-private Public-to-private
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Divisional LBOs Divisional LBOs
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Secondary LBOs Secondary LBOs
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Family LBOs Family LBOs
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LBO targets LBO targets
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Heterogeneity of Private Equity Firms Heterogeneity of Private Equity Firms
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The Impacts of Private Equity Buyouts The Impacts of Private Equity Buyouts
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Impact on Stockholder Returns and Drivers of PTPs Impact on Stockholder Returns and Drivers of PTPs
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Impact on Performance Impact on Performance
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Impact of Governance Mechanisms Impact of Governance Mechanisms
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Impact on Employees Impact on Employees
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Impact on Existing Shareholders Impact on Existing Shareholders
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Impact on Longevity Impact on Longevity
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Impact on Distress and Failure Impact on Distress and Failure
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Conclusions Conclusions
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References References
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24 Private Equity, Leveraged Buyouts, and Corporate Governance
Get accessDonald S. Siegel, Foundation Professor of Public Policy and Management and Director, School of Public Affairs, Arizona State University
Miguel Meuleman, Vlerick Leuven Gent Management School, University of Ghent
Kevin Amess is Associate Professor at Nottingham University Business School. He is a Fellow of the Centre for Management Buyout Research. For over 20 years Kevin has been conducting research on the consequences of Private Equity acquisitions for portfolio firms. His research has contributed widely to greater understanding of the consequences of Private Equity acquisitions on employees, innovation, and performance through journal publications, which include: Entrepreneurship Theory and Practice, European Economic Review, and Journal of Industrial Economics. He reports on, and provides advice for, governmental agencies such as the OECD, the US GAO, and UK government, as well as contributing to media debate.
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Published:01 July 2013
Cite
Abstract
This chapter takes a look at private equity, which usually refers to the funding of leveraged buyouts (LBOs) of well-known firms. It aims to improve the understanding of private equity and LBOs by reviewing a theory related to private equity and the evidence of its impact. This review includes a number of articles in entrepreneurship, finance, strategy, economics, and human resource management. It first summarizes the theoretical perspectives related to why private equity governance may have positive or negative effects on economic, social, and financial performance. It then reviews important empirical evidence from studies during the first and second waves.
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