Pay Now or Pay Later?: The Economics within the Private Equity Partnership

Victoria Ivashina and Josh Lerner

No 22660, NBER Working Papers from National Bureau of Economic Research, Inc

Abstract: The economics of partnerships have been of enduring interest to economists, but many issues regarding intergenerational conflicts and their impact on the continuity of these organizations remain unclear. We examine 717 private equity partnerships, and show that (a) the allocation of fund economics to individual partners is divorced from past success as an investor, being instead critically driven by status as a founder, (b) the underprovision of carried interest and ownership—and inequality in fund economics more generally—leads to the departures of senior partners, and (c) the departures of senior partners have negative effects on the ability of funds to raise additional capital.

JEL-codes: G24 J33 L26 (search for similar items in EconPapers)
Date: 2016-09
Note: CF
References: View references in EconPapers View complete reference list from CitEc
Citations:

Published as Victoria Ivashina & Josh Lerner, 2018. "Pay Now or Pay Later?: The Economics within the Private Equity Partnership," Journal of Financial Economics, .

Downloads: (external link)
http://www.nber.org/papers/w22660.pdf (application/pdf)

Related works:
Journal Article: Pay now or pay later? The economics within the private equity partnership (2019)
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:nbr:nberwo:22660

Ordering information: This working paper can be ordered from
http://www.nber.org/papers/w22660

Access Statistics for this paper

More papers in NBER Working Papers from National Bureau of Economic Research, Inc National Bureau of Economic Research, 1050 Massachusetts Avenue Cambridge, MA 02138, U.S.A.. Contact information at EDIRC.
Bibliographic data for series maintained by ().