CEF.UP – FIN Seminar/Webinar

Thursday – May 25^th, 2023 at 1:00 p.m. | Room 305| Online

“Private Equity Debt Funds: Who Wins and Who Loses?”

Florencio Lopez-de-Silanes  – SKEMA Business School – Université Côte d’Azur, and NBER (joint work with Axel Buchner and Armin Schwienbacher)

Abstract:

“We exploit a unique data set to provide the first analysis of the structure, performance and gain distribution of deals financed by the same private equity firm on the equity and debt sides (related deals). Most related deals are carried out by a few large and experienced PE firms. In support of the conflict of interest hypothesis, we document a transfer of value from debt to equity funds in related transactions relative to unrelated transactions. Yet, the overall value impact of related deals (debt and equity combined) is positive and limited partners of PE-affiliated debt funds do not loose overall. Related deals generate sizable gains for PE firms, most likely through the better ex-post incentives of these deals.”