Private Equity, Buy-outs, and Insolvency Risk
Mike Wright () and
Nick Wilson ()
Additional contact information
Mike Wright: Imperial College Business School
Nick Wilson: Leeds University Business School
No 8, Research Papers from Enterprise Research Centre
Private Equity restructuring using debt has been criticised for increasing financial distress and bankruptcy especially following the financial crisis. We build a unique dataset comprising the population of over 9 million company-year observations and 153,000 insolvencies during 1995-2010. We compare the insolvency hazard of the spectrum of buyout types within the corporate population over time and investigate the risk profile of the companies pre-buyout. Controlling for size, age, sector and macro-economic conditions private-equity backed buyouts are no more prone to insolvency than non-buyouts or other types of management buyins. Moreover, leverage is not the characteristic that distinguishes failed buyouts from those surviving.
Keywords: private equity; management buyouts; distress; bankruptcy; hazard models (search for similar items in EconPapers)
JEL-codes: D21 C25 G24 G32 G33 (search for similar items in EconPapers)
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (3) Track citations by RSS feed
Published in Journal of Business Finance & Accounting, Vol. 40, Issue 7-8, pages 949-990, September/October 2013
Downloads: (external link)
http://enterpriseresearch.ac.uk/wp-content/uploads ... ight-and-Wilson2.pdf First version, 2013 (application/pdf)
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:enr:rpaper:0008
Access Statistics for this paper
More papers in Research Papers from Enterprise Research Centre Contact information at EDIRC.
Bibliographic data for series maintained by Olivia Garcia (). This e-mail address is bad, please contact .