The Structure of Debt and Active Equity Investors: The Case of The Buyout Specialist

@article{Cotter2001TheSO,
  title={The Structure of Debt and Active Equity Investors: The Case of The Buyout Specialist},
  author={J. Cotter and Sarah W. Peck},
  journal={Journal of Financial Economics},
  year={2001},
  volume={59},
  pages={101-147}
}
This paper examines the role buyout specialists play in structuring the debt used to finance the LBO and in monitoring management in the post-LBO firm. We find that when buyout specialists control the majority of the post-LBO equity, the LBO transaction is likely to be financed with less short-term and/or senior debt and less likely to experience financial distress. We also find that buyout specialists have greater board representation on smaller boards, suggesting that they actively monitor… Expand
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