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Rssby Stuart Pallister
A recent study has called into question private equity investments by bank-affiliated PE firms. The study by INSEAD Professor Lily Fang with co-authors Victoria Ivashina and Josh Lerner of Harvard, called ‘An Unfair Advantage’? Combining Banking with Private Equity Investing, found that between 1983 and 2009, bank-affiliated groups accounted for more than a quarter of all PE investments.
It also found that the involvement of banks increases during peaks of PE cycles, with deals by bank-affiliated groups getting financing on ‘significantly better terms’ than other deals when the parent bank is part of the lending syndicate.
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Tags: INSEAD, Lily Fang, PE, Private equity, private investments, Volcker rule
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