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Private equity group reputation and financing structures in German leveraged buyouts

Author

Listed:
  • Ann-Kristin Achleitner

    (School of Management, Technische Universität München)

  • Reiner Braun

    (School of Management, Technische Universität München)

  • Eva Lutz

    (Heinrich-Heine-Universität)

  • Florian Tappeiner

    (School of Management, Technische Universität München)

Abstract

This study examines the relationship between the reputation of a private equity group and the financing structures used in leveraged buyouts within the context of the German leveraged loan market. In Germany, most buyouts are private-to-private transactions and banks still hold a dominant position as debt providers. Further, there is less institutional demand pressure due to the less heterogeneous group of institutional investors involved in syndicated loans. These particularities explain our main findings: While private equity sponsor reputation is related to the amount and structure of debt used as well as the amount of lender control imposed, it does not have an impact on interest costs of German leveraged loans.

Suggested Citation

  • Ann-Kristin Achleitner & Reiner Braun & Eva Lutz & Florian Tappeiner, 2018. "Private equity group reputation and financing structures in German leveraged buyouts," Journal of Business Economics, Springer, vol. 88(3), pages 363-392, May.
    • Handle: RePEc:spr:jbecon:v:88:y:2018:i:3:d:10.1007_s11573-017-0866-4
    DOI: 10.1007/s11573-017-0866-4
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    References listed on IDEAS

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    More about this item

    Keywords

    Leveraged buyouts; Private equity; Reputation; Financing structure; Control rights; German institutional context;
    All these keywords.

    JEL classification:

    • G21 - Financial Economics - - Financial Institutions and Services - - - Banks; Other Depository Institutions; Micro Finance Institutions; Mortgages
    • G24 - Financial Economics - - Financial Institutions and Services - - - Investment Banking; Venture Capital; Brokerage
    • G32 - Financial Economics - - Corporate Finance and Governance - - - Financing Policy; Financial Risk and Risk Management; Capital and Ownership Structure; Value of Firms; Goodwill
    • G34 - Financial Economics - - Corporate Finance and Governance - - - Mergers; Acquisitions; Restructuring; Corporate Governance

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