Leveraged Buyouts and Private Equity- A summary and current events

Finance & Accounting
Pages 12 (3012 words)
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Leveraged Buyouts and Private Equity Contents 1 Introduction 3 Thesis statement 3 Emergence 3 Theory of leveraged buyout 4 Private equity firms 4 Private equity funds 6 Private equity transactions 8 Private equity fund returns 9 Boom and Bust Cycles in Private Equity 11 Current Events of Private Equity 12 Conclusion 13 Reference 15 Introduction An organization is often taken over by a particular firm involved in investment activities.


There is a difference with venture capital firms as they do not obtain the major proportion of control by investing in young and dynamic firms. Thesis statement Leveraged Buyouts and Private Equity- A summary and current events Emergence Leveraged buyout first came into the picture as an important phenomenon in 1980s. It was predicted that these types of organizations would form the major portion of organization which will eventually become the dominant one. These types of private equity firms involved themselves in various measures like providing incentives based on managerial abilities, and introduced the concept of active governance. They relied upon the possibility of junk bond financing. A few years later the junk bond market crashed resulting in bankruptcy of several leveraged buyouts and the leveraged buyouts of public to private transactions vanished in the starting phases of 1990s. But the market of leveraged buyout was also suffering a gloomy phase as the private equity firms continued their operation by acquiring private companies. The US experienced the boom in market of leveraged buyout in the mid 2000s. ...
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