Debt and Leverage in Private Equity: A Survey of Existing Results and New Findings
This paper examines leverage and debt financing in the private equity buyout market. We provide an overview of how debt is utilized in buyout investment structures and a review of existing theoretical and empirical academic literature. The analysis also includes results from new data sources with information on deal structure and performance since the global financial crisis (GFC). We document that leverage ratios (Net Debt / EBITDA) have increased substantially in recent years and the increase is even more pronounced after unwinding EBITDA “adjustments” which have become increasingly large. More
Has Persistence Persisted in Private Equity? Evidence from Buyout and Venture Capital Funds
We present new evidence on the persistence of U.S. private equity (buyout and venture capital) funds using cash-flow data sourced from Burgiss’s large sample of institutional investors. Previous research, studying largely pre-2000 data, finds strong persistence for both buyout and venture capital (VC) firms. Using ex post or most recent fund performance (as of June 2019), we confirm the previous findings on persistence overall as well as for pre-2001 and post-2000 funds. More
Do private equity buyouts in the U.S. and Europe have positive effects on productivity and job growth?
John Gulliver, Program on International Financial Systems, and Wei Jiang, Columbia Business School and IPC AMRA Advisory Board, examine the role of private equity in the overall economy in this report. More
Top Academic Researchers Become Newest Members of First Street Foundation Flood Lab, Studying Flooding Impact on the U.S.
Researchers at UNC Chapel Hill, including Jacob Sagi, an expert on financial economics, decision theory, and real estate finance, Andra Ghent, associate professor of finance, and Greg Characklis, professor of Environmental Engineering, have recently joined the First Street Foundation Flood Lab, a partnership that provides free access to cutting edge flood risk data for critical public analysis. More
Decoding the Worst Quarter in Economic History
There is no doubt that the COVID-19 crisis has devastated the U.S. economy. But the particulars of this devastation are difficult to gauge, because unique aspects of the of the pandemic distort the data commonly used to assess such situations. More
IPC is Pleased to Announce a New Research Partnership with the Hedge Fund Research and Intelligence Organization PivotalPath
The Institute for Private Capital (IPC) is pleased to announce a new research partnership with the hedge fund research and intelligence organization PivotalPath. PivotalPath’s proprietary research platform, PivotalBase, provides predictive ratings on more than 2,000 institutional funds representing more than $2 trillion of global hedge fund assets. More
How Will COVID-19 Affect Commercial Real Estate?
Commercial real estate is a major asset class, with an estimated value of more than $12 trillion in the U.S. alone. But the stay-at-home orders and business closures precipitated by the COVID-19 pandemic have the potential to negatively – and disastrously – affect commercial properties. What will the short- and long-term impacts be, which types of properties will be hardest hit and what policies can be put in place to help stem the tide of losses? UNC Kenan-Flagler Business School Professor and Leonard W. Wood Center for Real Estate Studies Faculty Advisor Andra Ghent and her colleagues examine these issues in this week’s Kenan Insight. More
IPC Welcomes T.J. Carlson, CIO for TMRS, as its Newest Board Member
March 1, 2020 – The Institute for Private Capital announces the appointment of the newest member to its Board of Directors, TJ Carlson. TJ is the chief investment officer for the Texas Municipal Retirement System (TMRS) in Austin, Texas. More
The COVID-19 Pandemic and Small Business Employment
The COVID-19 pandemic has put 18 million jobs at small businesses in the U.S. at risk – which could as much as quadruple the nation’s total unemployment rate. The effects of both the coronavirus and recent government relief programs were explored by a panel of Kenan Institute-convened experts during a press briefing held yesterday. The full recording of this briefing—along with a deeper-dive analysis on the specific implications of the financial downturn on small business employment by Kenan Institute Research Director Professor Christian Lundblad and UNC Kenan-Flagler Business School Professor Paige Ouimet—is available in this week’s Kenan Insight. More
Business and Economic Impact of COVID-19
To help separate fact from fiction and legitimate concern from panic, the Kenan Institute of Private Enterprise and UNC Kenan-Flagler Business School convened six top faculty researchers to discuss the likely effects of the pandemic on business and the economy. More