When the going gets tough: Private equity firms’ role as agents and the resolution of financial distress in buyouts

Miguel Meuleman, Nick Wilson, Mike Wright and Jeroen Neckebrouck

Journal of Small Business Management, 2022, vol. 60, issue 3, 513-540

Abstract: Previous research has focused on a private equity (PE) firm’s role as principal in its relationship with an investee, but few studies have looked into their role as agents for their investors. We examine how a PE firm’s relationship as agent for limited partners (LPs) and banks influences its incentives to resolve financial distress in the investee. We examine the effect of PE fundraising reputation, PE fundraising activity, and PE bank affiliation on the likelihood of a financially distressed buyout ending in bankruptcy. We build a unique data set of 338 distressed buyouts in the United Kingdom to test our hypotheses.

Date: 2022
References: Add references at CitEc
Citations:

Downloads: (external link)
http://hdl.handle.net/10.1080/00472778.2020.1717242 (text/html)
Access to full text is restricted to subscribers.

Related works:
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:taf:ujbmxx:v:60:y:2022:i:3:p:513-540

Ordering information: This journal article can be ordered from
http://www.tandfonline.com/pricing/journal/ujbm20

DOI: 10.1080/00472778.2020.1717242

Access Statistics for this article

Journal of Small Business Management is currently edited by Eric Liguori

More articles in Journal of Small Business Management from Taylor & Francis Journals
Bibliographic data for series maintained by Chris Longhurst ().