Pay Now or Pay Later?: The Economics within the Private Equity Partnership / Victoria Ivashina, Josh Lerner.

Format:

Book

Author/Creator:

Ivashina, Victoria.

Contributor:

National Bureau of Economic Research.

Lerner, Josh.

Series:

Working Paper Series (National Bureau of Economic Research) no. w22660.

NBER working paper series no. w22660

Language:

English

Physical Description:

1 online resource: illustrations (black and white);

Other Title:

Pay Now or Pay Later?

Place of Publication:

Cambridge, Mass. National Bureau of Economic Research 2016.

Summary:

The economics of partnerships have been of enduring interest to economists, but many issues regarding intergenerational conflicts and their impact on the continuity of these organizations remain unclear. We examine 717 private equity partnerships, and show that (a) the allocation of fund economics to individual partners is divorced from past success as an investor, being instead critically driven by status as a founder, (b) the underprovision of carried interest and ownership--and inequality in fund economics more generally--leads to the departures of senior partners, and (c) the departures of senior partners have negative effects on the ability of funds to raise additional capital.

Notes:

Print version record

September 2016.