Private Equity Syndication: Agency Costs, Reputation and Collaboration
Meuleman, Miguel Wright, Mike Manigart, Sophie Lockett, Andy
Meuleman, Miguel
Wright, Mike
Manigart, Sophie
Lockett, Andy
Citations
Altmetric:
Publication Type
Journal article with impact factor
Editor
Supervisor
Publication Year
2009
Journal
Journal of Business Finance and Accounting
Book
Publication Volume
36
Publication Issue
5/6
Publication Begin page
616
Publication End page
644
Publication NUmber of pages
Collections
Abstract
Syndicates are a form of inter‐firm alliance in which two or more private equity firms invest together in an investee firm and share a joint pay‐off, and are an enduring feature of the leveraged buyout (LBO) and private equity industry. This study examines the relationship between syndication and agency costs at the investor‐investee level, and the extent to which the reputation and the network position of the lead investor mediate this relationship. We examine this relationship using a sample of 1,122 buyout investments by 80 private equity companies in the UK between 1993 and 2006. Our findings show that where agency costs are highest, and hence ex‐post monitoring by the lead investor is more important, syndication is less likely to occur. The negative relationship between agency costs and syndication, however, is alleviated by the reputation and network position of the lead investor firm.
Research Projects
Organizational Units
Journal Issue
Keywords
Corporate Finance, Mergers & Acquisitions