Part of the criticism of LBOs
is that they involve a wealth transfer from debt holders to shareholders.
This is likely to lead to the return of the circle of M&A activity, IPO exits, and primary LBOs
, as equity capital is recycled.
As the economic prospects for LBOs
improve, PE firms are under increasing pressure from the pension funds, endowment, money managers, sovereign wealth fund, and other institutional investors to deploy assets and provide returns.
The most comprehensive analysis of private equity LBOs
in the US reports reduced employment at a faster rate in existing establishments and increase employment at a faster rate in newly-created establishments.
Credit conditions have a strong effect on prices paid in LBOs
, even after controlling for prices of equivalent public market companies.
Revenues from the Levy rose as successive Governments liberalised the restrictions on LBOs
. In 1986, live TV pictures were introduced into betting shops.
On the private equity spectrum, growth equity occupies an important place between venture capital and LBOs
. Growth equity is distinct in its focus on working with promising companies to achieve business scale and market leadership.
Survey respondents also painted a bleak picture for future LBOs
, with an overwhelming 94% expecting a decline of at least 10% in deal volumes in 2008.
Over the past three years, retail LBO
activity skyrocketed due to the overflow of capital in the private-equity arena and the availability of low-cost debt funding.
Leveraged buyouts (LBOs
), all the rage in the 1980s, have metastasized into private equity.
More than $100 billion in LBOs
were carried out in the last year.
are particularly interesting because they lead to a much larger increase in leverage than do most debt issuances.