This article examines the post-financial crisis trends in the private equity industry. Although most research has followed the pre-crisis trends, we show that investors are
demanding the inclusion of more investor-favorable compensation terms in limited partnership agreements.
Our findings suggest that these new terms not only provide the
investors with more favorable management fee and profit distribution arrangements, but
also give them more control over the fund?s investment decisions. Importantly, the new
pattern also reveals the inclusion of more straightforward co-investment rights. Besides
the contractual ?improvements?, we observe that investors want to see more skin in the
game from the managers/general partners.
Credit ratings have been shown to be imperfect and sometimes biased measures of risk. Has this affected their use in unregulated settings? Using textual analysis, we measure the use of credit ratings in investment mandates of fixed income mutual...Read more
We provide an extensive analysis of the payout policy of U.S. banks during the crisis to examine potential risk-shifting and signaling motives of banks. We estimate an empirical model of bank payouts to assess the extent to which changes in...Read more
This paper investigates what we can learn from the financial crisis about the link between accounting and financial stability. The picture that emerges ten years after the crisis is substantially different from the picture that dominated the...Read more
The public company has historically been a crucial element of the American economy. Various predictions have been made recently that the public company’s future is bleak. This essay maintains these gloomy conjectures are erroneous. Companies...Read more