| Item Type |
Forthcoming
|
| Abstract |
We analyze the relationship between contracts and returns in private equity (PE) investments. Contractual control in the form of covenants tends to be employed to identify good deals. Better quality fi?rms are more likely to have covenant-rich contracts, as they are less concerned by the constraints imposed by the covenants. PE investors appoint closer associates of the fund in deals that are performing poorly but tend to outsource board governance in better deals. Collectively, our evidence suggests that PE investors operate along two dimensions, choosing covenants and board seats di¤erently, based on the ex-ante quality of the company. |
| Authors |
García-Appendini, Emilia; Ippolito, Filippo & Caselli, Stefano |
| Journal or Publication Title |
Journal of Financial Intermediation |
| Language |
English |
| Keywords |
private equity funds, venture capital, IRR, covenants, board directors |
| Subjects |
economics |
| HSG Classification |
not classified |
| Refereed |
Yes |
| Date |
5 September 2012 |
| Publisher |
Elsevier |
| Place of Publication |
Amsterdam |
| Number |
in press, available online |
| ISSN |
1042-9573 |
| ISSN-Digital |
1096-0473 |
| Publisher DOI |
https://doi.org/10.1016/j.jfi.2012.08.002 |
| Depositing User |
Prof. PhD Emilia García-Appendini
|
| Date Deposited |
28 Sep 2012 11:47 |
| Last Modified |
23 Aug 2016 11:14 |
| URI: |
https://www.alexandria.unisg.ch/publications/216971 |
Contracts and Returns in Private Equity Investments
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