Optimal ownership structure in private equity
Yang Liu and
European Financial Management, 2018, vol. 24, issue 1, 113-135
We develop a tractable model to analyse the valuation of a general partner (GP) and the ownership allocation in a private equity (PE) fund. Our results indicate that holding ownership will increase GP's value. We further explore the influential factors that affect GP's optimal ownership decision. Our model predicts that GP's managerial skill has positive effects on GP's shareholding choice. Factors such as leverage, unspanned risks, GP's compensation have negative impacts on GP ownership decision. The fund's maturity has a nonâ€ monotonic and concave influence. Moreover, the widely used performance measures implied by our model are consistent with empirical findings.
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (1) Track citations by RSS feed
Downloads: (external link)
This item may be available elsewhere in EconPapers: Search for items with the same title.
Export reference: BibTeX
RIS (EndNote, ProCite, RefMan)
Persistent link: https://EconPapers.repec.org/RePEc:bla:eufman:v:24:y:2018:i:1:p:113-135
Ordering information: This journal article can be ordered from
http://www.blackwell ... bs.asp?ref=1354-7798
Access Statistics for this article
European Financial Management is currently edited by John Doukas
More articles in European Financial Management from European Financial Management Association Contact information at EDIRC.
Bibliographic data for series maintained by Wiley Content Delivery ().