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  • September 2013
  • Article
  • Review of Financial Studies

Combining Banking with Private Equity Investing

By: Lily H. Fang, Victoria Ivashina and Josh Lerner
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Abstract

Bank-affiliated private equity groups account for 30% of all private equity investments. Their market share is highest during peaks of the private equity market, when the parent banks arrange more debt financing for in-house transactions yet have the lowest exposure to debt. Using financing terms and ex-post performance, we show that overall banks do not make superior equity investments to those of standalone private equity groups. Instead, they appear to expand their private equity engagement to take advantage of the credit market booms while capturing private benefits from cross-selling of other banking services.

Keywords

Regulation; Private Equity; Leveraged Buyouts; Banks and Banking; Banking Industry

Citation

Fang, Lily H., Victoria Ivashina, and Josh Lerner. "Combining Banking with Private Equity Investing." Review of Financial Studies 26, no. 9 (September 2013): 2139–2173.
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About The Authors

Victoria Ivashina

Finance
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Josh Lerner

Entrepreneurial Management
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Related Work

    • 2013
    • Faculty Research

    Combining Banking with Private Equity Investing

    By: Lily Fang, Victoria Ivashina and Josh Lerner
Related Work
  • Combining Banking with Private Equity Investing By: Lily Fang, Victoria Ivashina and Josh Lerner
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