Skip to Main Content
HBS Home
  • About
  • Academic Programs
  • Alumni
  • Faculty & Research
  • Baker Library
  • Giving
  • Harvard Business Review
  • Initiatives
  • News
  • Recruit
  • Map / Directions
Faculty & Research
  • Faculty
  • Research
  • Featured Topics
  • Academic Units
  • …→
  • Harvard Business School→
  • Faculty & Research→
Publications
Publications
  • 2016
  • Working Paper
  • HBS Working Paper Series

Pay Now or Pay Later? The Economics within the Private Equity Partnership

By: Victoria Ivashina and Josh Lerner
  • Format:Print
  • | Language:English
  • | Pages:49
ShareBar

Abstract

The economics of partnerships have been of enduring interest to economists, but many issues regarding intergenerational conflicts and their impact on the continuity of these organizations remain unclear. We examine 717 private equity partnerships and show that (a) the allocation of fund economics to individual partners is divorced from past success as an investor, being instead critically driven by status as a founder; (b) that the underprovision of carried interest and ownership—and inequality in fund economics more generally—leads to the departures of senior partners; and (c) the departures of senior partners have negative effects on the ability of funds to raise additional capital.

Keywords

Partnerships; Leveraged Buyout; Venture Capital; Private Equity; Partners and Partnerships; Leveraged Buyouts

Citation

Ivashina, Victoria, and Josh Lerner. "Pay Now or Pay Later? The Economics within the Private Equity Partnership." Harvard Business School Working Paper, No. 16-119, March 2016.
  • SSRN
  • Read Now

About The Authors

Victoria Ivashina

Finance
→More Publications

Josh Lerner

Entrepreneurial Management
→More Publications

Related Work

    • January 2019
    • Journal of Financial Economics

    Pay Now or Pay Later? The Economics within the Private Equity Partnership

    By: Victoria Ivashina and Josh Lerner
Related Work
  • Pay Now or Pay Later? The Economics within the Private Equity Partnership By: Victoria Ivashina and Josh Lerner
ǁ
Campus Map
Harvard Business School
Soldiers Field
Boston, MA 02163
→Map & Directions
→More Contact Information
  • Make a Gift
  • Site Map
  • Jobs
  • Harvard University
  • Trademarks
  • Policies
  • Accessibility
  • Digital Accessibility
Copyright © President & Fellows of Harvard College