Buyouts: A Primer / Tim Jenkinson, Hyeik Kim, Michael S. Weisbach.

Format:

Book

Author/Creator:

Jenkinson, Tim.

Contributor:

National Bureau of Economic Research.

Kim, Hyeik.

Weisbach, Michael S.

Series:

Working Paper Series (National Bureau of Economic Research) no. w29502.

NBER working paper series no. w29502

Language:

English

Physical Description:

1 online resource: illustrations (black and white);

Place of Publication:

Cambridge, Mass. National Bureau of Economic Research 2021.

Summary:

This paper provides an introduction to buyouts and the academic literature about them. Buyouts are initiated by "buyout funds", which are limited partnerships raised from mostly institutional investors. The funds earn returns for their investors by improving the operations of the firms they acquire and exiting them for a profit. Buyout funds have grown substantially and currently raise more than $400 billion annually in capital commitments. We first discuss the institutional environment that developed to foster such buyouts and to provide incentives for general partners and firm managers to earn returns for the fund's investors. We then describe various strategies that funds use to increase the values of their portfolio companies. The paper provides up to date statistics on all aspects of the buyout industry. Finally, we present a summary of the academic literature on buyouts. This literature has paid particular attention to the extent to which buyouts earn risk-adjusted abnormal returns for their investors, as well as the sources of those returns.

Notes:

Print version record

November 2021.