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• Article | Review of Financial Studies | April 2019

  Private Equity and Financial Fragility during the Crisis

  Shai Bernstein, Josh Lerner and Filippo Mezzanotti

  Do private equity firms contribute to financial fragility during economic crises? We find that during the 2008 financial crisis, PE-backed companies increased investments relative to their peers, while also experiencing greater equity and debt inflows. The effects are stronger among financially constrained companies and those whose private equity investors had more resources at the onset of the crisis. PE-backed companies consequentially experienced higher asset growth and increased market share during the crisis.

  Keywords: Private Equity; Financial Crisis; Performance; Financial Condition;

  Citation:

  Bernstein, Shai, Josh Lerner, and Filippo Mezzanotti. "Private Equity and Financial Fragility during the Crisis." Review of Financial Studies 32, no. 4 (April 2019): 1309–1373. (Earlier version distributed as National Bureau of Economic Research Working Paper No. 23626 and Harvard Business School Working Paper No. 18-005.)  View Details

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• Supplement | HBS Case Collection | January 2015 (Revised March 2019)

  Hilton Hotels: What a Long, Strange Trip it's Been (B)

  Nori Gerardo Lietz

  Citation:

  Lietz, Nori Gerardo. "Hilton Hotels: What a Long, Strange Trip it's Been (B)." Harvard Business School Supplement 215-050, January 2015. (Revised March 2019.)  View Details

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• Case | HBS Case Collection | March 2017 (Revised March 2019)

  Mubadala and EBX: To X or to X It?

  Nori Gerardo Lietz, Ricardo Andrade and Sayiddah Fatima McCree

  In April 2012, Mubadala, Abu Dhabi's sovereign wealth fund invested $2 billion in Brazilian conglomerate EBX, believing the company to be undervalued by the public markets. Shortly thereafter, however, EBX and its multiple business lines began to spiral downward. Hani Barhoush and Oscar Fahlgren, members of Mubadala's investment team, were now charged with leading the restructuring efforts on behalf of Mubadala. The situation was exceptionally complex and involved dealing with different creditors, untangling cross-collateral clauses from EBX’s subsidiaries’ loans, and foreclosing on personal guarantees from Batista. There were also strong political challenges, since most companies operated in tightly regulated markets, some were publicly-traded, and many had received substantial subsidized financing from Brazil’s Development Bank (BNDES). Finally, the country’s economic and political environments were rapidly deteriorating, with a combination of stagflation, rising interest rates, and successive popular demonstrations causing the gradual loss of governability and ultimate impeachment of President Dilma Vana Rousseff.

  Keywords: sovereign wealth funds; conglomerates; Investing; corporate structure; International; restructuring; Sovereign Finance; Business Conglomerates; Investment; Financing and Loans; Restructuring; Organizational Structure; Economy; Brazil; Abu Dhabi;

  Citation:

  Lietz, Nori Gerardo, Ricardo Andrade, and Sayiddah Fatima McCree. "Mubadala and EBX: To X or to X It?" Harvard Business School Case 217-065, March 2017. (Revised March 2019.)  View Details

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