Private equity: Capitalism's misunderstood entrepreneurs and catalysts for value creation

Independent Review

Volumn 13, Issue 2, 2008, Pages 245-288

  Haarmeyer, David ^a  

^a PowerAdvocate ^*

Author keywords

[No Author keywords available]

Indexed keywords

CAPITALISM; COMPARATIVE ADVANTAGE; ENTREPRENEUR; GROWTH RATE; INVESTMENT INCENTIVE; MODELING; PUBLIC-PRIVATE PARTNERSHIP;

EID: 52249123859     PISSN: 10861653     EISSN: None     Source Type: Journal    
DOI: None     Document Type: Article

References (85)

1. Arnold, Martin. 2007a. Buy-out Chiefs in Market for Personal Loans. Financial Times, June 16.
2. Arnold, Martin. 2007b. SVG Chairman Breaks Tax Taboo. Financial Times, June 4.
3. A. T. Kearny. 2007. Creating New Jobs and Value with Private Equity. Available at: http://www.atkearney.com/main.taf?p=5,3,1,158.
4. Bailey, Elizabeth M. 2007. Are Private Equity Consortia Anticompetitive? The Economics of Club Bidding. The Antitrust Source (April): 1-8.
5. Bary, Andrew. 2007. Unclear LBO Path for Clear Channel. Barron's, January 22. Available at: http://online.barrons.com/public/article/ SB116925715940882299- doweh5ggJNU24jqxsnk5alg_rpg_20070219.html?mod=mktw.
6. Beales, Richard. 2007. Case Study: Domino's. Financial Times, July 25.
7. Berkshire Hathaway Inc. 1999. An Owner's Manual. A message from Warren E. Buffett, chairman and CEO, January. Omaha, Neb.: Berkshire Hathaway Inc. Available at: http://www.berkshirehathaway.com/owners.html.
8. Berman, Dennis. 2007a. Buyout Shops: Sharks Serving Vital Function. Wall Street Journal, March 13.
9. Berman, Dennis. 2007b. Unusual Buyout Offers a Piece to Shareholders. Wall Street Journal, April 27.
10. Berman, Dennis, and Sarah McBride. 2007. Clear Channel Showdown Signals Investors' Wariness of Privatizations. Wall Street Journal, January 27.
11. Berman, Dennis, and Henry Sender. 2006. Probe Brings "Club Deals" to Fore. Wall Street Journal, October 11.
12. Big Union Takes Skeptical Look at Private Equity. 2007. New York Times Dealbook, April 24.
13. Biltz, Roger. 2007. Dealmaker Puts Blackstone in the Penthouse. Financial Times, July 11. Available at: http://search.ft.com/ ftArticic?queryText=Dealmaker+Puts+Blackstone+in+the+Penthouse%2C&y= 9&aje=true&x=9&id=070712000668&ct=0.
14. Blackstone Group L.P. 2007. Preliminary Prospectus. SEC Form S-1, March 22. New York: Blackstone Group. Available at: http://www.sec.gov/ Archives/edgar/data/1393818/000104746907002068/a2176832zs-1.htm.
15. Blinder, Alan. 2007. The Under-Taxed Kings of Private Equity. New York Times, July 29. Available at: http://www.nytimes.com/2007/07/29/ business/yourmoney/29view.html.
16. Boshkov, Stefan, and Jennifer Kurtis. 2007. Carried Interests: Payment for Services or a Return on Investment. Nixon Peabody (April 18): 1-3. Available at: http://www.nixonpeabody.com/linked_media/ publications/PvtEqLBO_eIss2_Spring07.pdf.
17. Breakingviews. 2006. On Going Private: Investors Beware. Wall Street Journal, November 18.
18. Breakingviews. 2007. Zell Welds a Mighty Gavel. Wall Street Journal, January 26.
19. Cao, Jerry X. 2008. An Empirical Study of LBOs and Takeover Premium. Social Science Research Network, February 18. Available at: http:// papers.ssrn.com/sol3/papers.cfm?abstract_id=1086775.
20. Cao, Jerry X., and Josh Lerner. 2006. The Performance of Reverse Leverage Buyouts. Working paper, October 15. Cambridge, Mass.: Harvard Business School. Available at: http://ssm.com/abstract=937801.
21. Caplan, Bryan. 2007. The Myth of the Rational Voter: Why Democracies Choose Bad Policies. Princeton, N.J.: Princeton University Press.
22. Carey, David. 2007. Deliver and You Get Paid. Deal.com, June 5. Available at: http://www.thedeal.com/corporatedealmaker/2007/08/ deliver_and_you_get_paid.php.
23. Colvin, Geoffrey, and Ram Charan. 2006. Private Equity, Private Lives. Fortune, November 27. Available at: http://money.cnn.com /magazines/fortune/fortune_archive/2006/11/27/8394344/index.htm.
24. Dealogic. 2007. Information supplied directly to author.
25. Eden, Scott. 2007. The Original Buyout King. Dealmaker (March-April): 92.
26. Flaherty, Michael, and Lilla Zuill. 2007. Blackstone Raises $4.1 bln; Largest US IPO in 5 Yrs. Reuters, June 22. Available at: http:// www.reuters.com/arficle/companyNewsAndPR/idUSN2142941920070622.
27. Gertner, Robert, and Steve Kaplan. 1996. The Value-Maximizing Board. Working paper. Chicago: University of Chicago, Graduate School of Business, December.
28. Gilson, Ronald, and Reiner M. Kraakman. 2005. Takeovers in the Boardroom: Burke versus Schumpeter. Social Science Research Network, May. Available at: http://papers.ssrn.com/sol3/ papers.cfm?abstract_id=732783.
29. Gross, Bill. 2007. Investment Outlook: Enough Is Enough. PIMCO, August. Available at: http://www.pimco.com/LeftNav/Featured+Market+ Commentary/IO/2007/IO+August+2007.htm.
30. Guerrera, Francesco, and James Politi. 2007a. Legrand Poses Dilemma of When to Flip Stake. Financial Times, May 14.
31. Guerrera, Francesco, and James Politi. 2007b. Private Dose of Tough Love. Financial Times, May 15. Available at: http://search.ft.com/ ftArticle?queryText=A+Private+Dose+of+ Tough+Love&aje=false&id= 070514009609&ct=0.
32. Guerrera, Francesco, and James Politi. 2007c. Private Equity Firms Aid Conglomerates. Financial Times, January 10.
33. Guerrera, Francesco, James Politi, and Ben White. 2007. Pig Flies High as Blackstone Barons Unveil Riches. Financial Times, June 12.
34. Haarmeyer, David. 2006. Corporate Governance Rx: Active Investors. Directors Monthly (National Association of Corporate Directors) (June): 8-10.
35. Haarmeyer, David. 2007. The Revolution in Active Investing: Creating Wealth and Better Governance. Journal of Applied Corporate Finance 19, no. 1 (winter): 26-41.
36. Holthausen, Robert, and David Larcker. 1997. Performance, Leverage, and Ownership Structure in Reverse LBOs. Journal of Applied Corporate Finance (spring): 293-332.
37. Hughes, Chris. 2007. Why It Can Pay to Think the Unthinkable. Financial Times, May 30. Available at: http://search.ft.com/ ftArticle?queryText=Why+It+Can+Pay+ to+Think+the+Unthinkable&y=3&aje= false&x=78cid=070529008140&ct=0.
38. Jensen, Michael C. 1986. Agency Costs of Free Cash Flow, Corporate Finance, and Takeovers. American Economic Review 76, no. 2 (May): 323-29.
39. Jensen, Michael C. 1993. The Modern Industrial Revolution, Exit, and Failure of Internal Control Systems. Journal of Finance 48, no. 3 (July): 831-80.
40. Kahan, Marcel, and Edward Rock. 2007. Hedge Funds in Corporate Governance and Corporate Control. University of Pennsylvania Law Review 155, no. 5 (May): 1021-93.
41. Kaplan, Steve, and Antoinette Schoar. 2005. Private Equity Performance: Returns, Persistence, and Capital Flows. Journal of Finance 60, no. 4 (August): 1791-1823.
42. Kinsley, Michael. 2006. A Capitalist Swindle. Washington Post, November 21.
43. Klein, April, and Emanuel Zur. 2006. Hedge Fund Activism. Working Paper no. 140/2006. Brussels: European Corporate Governance Institute, October.
44. Klein, M., Marc Zenner, and A. Shivdasani. 2006. The Private Equity Revolution: Are You Ready? New York: Citigroup Corporate and Investment Banking, November 6.
45. Kranhold, Kathryn, and Joann S. Lublin. 2006. $100 Million Helps Lure Away General Electric Veteran. Wall Street Journal, August 24.
46. Lerner, Josh. 2007. Government's Misguided Probe of Private Equity. Working Knowledge, (Harvard Business School), March 14. Available at: http://hbswk.hbs.edu/item/5655.html.
47. Lippert, John. 2007. Carving Up Detroit. Bloomberg Markets (June): 55.
48. Macey, Jonathan. 2007. What Sarbox Wrought. Wall Street Journal, April 7. Available at: http://online.wsj.com/article/ SB117591225568262911-search.html?KEYWORDS= jonathan+macey&COLLECTION= wsjie/6month.
49. McCafferty, Joseph. 2007. The Buyout Binge. CFO Magazine (April 1). Available at: http://www.cfo.com/article.cfm/8909971/ c_8910395?f=singlepage.
50. Meerkatt, Heino, and John Rose. 2006. What Public Company's Can Learn from Private Equity. Boston: Boston Consulting Group.
51. Moon, John J. 2006. Public vs Private Equity. Journal of Applied Corporate Finance (summer): 76-82.
52. Morgan Stanley Roundtable on Private Equity and Its Import for Public Companies. 2006. Journal of Applied Corporate Finance 18, no. 3 (summer): 8-37.
53. Muller, Jerry Z. 2002. The Mind and the Market: Capitalism in Western Thought. New York: First Anchor Books.
54. Paulden, Pierre. 2006. Alpha Maelstorm. Institutional Investor (June).
55. Pettit, Justin. 2007. Too Much Money. Strategy and Business (spring). Available at: http://www.strategy-business.com/press/article/ 07112?pg=0.
56. Phelps, Edmund. 2006. Dynamic Capitalism. Wall Street Journal, October 10. Available at: http://www.opinionjournal.com/editorial/ feature.html?id=110009068.
57. Politi, James. 2007. TXU Defends Benefits of $45bn Buyout. Financial Times, February 26. Available at: http://search.ft.com/ ftArticle?queryText=+%E2%80%9CTXU+Defends+ Benefits+of+%2445bn+Buyout&aje= false&id=070226010487&ct=0.
58. Politi, James, and Deborah Brewster. 2007. KKR and TPG Face TXU Investor Fight. Financial Times, July 25.
59. Private Equity Intelligence (PEI). 2007a. Private Equity Spotlight (London) 2, no. 10 (January): 1.
60. Private Equity Intelligence (PEI). 2007b. Private Equity Spotlight (London) 3, no. 5 (May): 1-15.
61. Private Equity Intelligence (PEI). 2007c. Private Equity Spotlight (London) 3, no. 7 (July): 1-14.
62. Private Equity Players Hit the Big Time: An "Out-of-Body Experience." 2007. KnowledgeΩharton. Available at: http://knowledge.wharton.upenn.edu.
63. Prowse, Stephen. 1998. The Economics of the Private Equity Market. Federal Reserve Bank of Dallas Economic Review (third quarter): 21-34.
64. Raghavan, Anita. 2007. Debt and the Corporate Tax Base. Wall Street Journal, June 16-17.
65. Reed, John. 2007. Cerberus Faces Obstacles in Fixing Chrysler. Financial Times, May 14.
66. Rosenbush, Steve. 2007a. How Texas Pacific Cleaned Up at J. Crew. Business Week, February 6. Available at: http:/ /www.businessweek.com/bwdaily/dnflash/content/ feb2007/db20070206_483648.htm.
67. Rosenbush, Steve. 2007b. Private Equity Slugfest. Business Week, February 13. Available at: http://www.businessweek.com/bwdaily/dnflash/ content/feb2007/db20070212_956645.htm.
68. Schumpeter, Joseph. 1962. Capitalism, Socialism, and Democracy. New York: Harper Torchbooks.
69. Seligman, Dan. 2007. The Colorful Life of Capital's Champion. Wall Street Journal, April 5.
70. Sender, Henry. 2007. Inside the Minds of Kravis, Roberts. Wall Street Journal, January 3.
71. Service Employees International Union. 2007. Behind the Buyouts: Inside the World of Private Equity. Washington, D.C.: Service Employees International Union, April.
72. Smith, Peter. 2005. Blackstone Magic: How Two Men Rode the Private Equity Wave and Landed a Fortune. Financial Times, December 1.
73. Sorkin, Andrew Ross. 2007. Of Private Equity, Politics, and Income Taxes. New York Times Dealbook, March 11.
74. Stulz, Rene, Leonce L. Bargeron, Frederik Schlingemann, and Chad Zutter. 2007. Why Do Private Acquirers Pay So Little Compared to Public Acquirers? National Bureau of Economic Research (NBER) Working Paper. Cambridge, Mass.: NBER. Available at: http://www.nber.org/papers/w13061.
75. Taxing Times. 2007. Private Equity Online, May 11, 1. Available at: http://www.privateequityonline.com.
76. Taylor, Andrew, and Chris Bryant. 2007. Buyout Firms Defy Job-Cutting Reputation. Financial Times, April 2.
77. Teitelbaum, Richard. 2007. The KKR Way. Bloomberg Markets (July): 38.
78. Thomson Financial and National Venture Capital Association. 2007. Private Equity Performance Remains Steady in Q3 2006. New York and Arlington, Va.: Thomson Financial and National Venture Capital Association, January 29.
79. Werdigier, Julia. 2007. In Europe, Private Equity Firms Strive to Buff Image. New York Times, March 5.
80. Wessel, David. 2002. Professor Summers Offers Economic Policy Precepts. Wall Street Journal, October 21. Available at: http:// online.wsj.com/article/ SB1034802542167161468.html?mod= economy_secondary_stories_hs.
81. Whitehouse, Kaja. 2007. The Activist Game: It's Not just for Hedgies. Wall Street Journal, March 14.
82. Wong, Grace. 2007. Private Equity and the Job Cut Myth. CNN Money.com, May 2. Available at: http://money.cnn.com/2007/05/02/ markets/pe_jobs/index.htm.
83. Wright, Mike, Andrew Burrows, Rod Ball, and Louise Scholer. 2007. Private Equity and Buy-outs: Jobs, Leverage, Longevity, and Sell-offs. London: Centre for Management Buyout Research, Nottingham University Business School. Available at: http://www.nottingham.ac.uk /business/cmbor/PEarticle.pdf
84. Wright, Mike, Michael Jensen, Douglas Cumming, and Don Siegel. 2007. The Impact of Private Equity: Setting the Record Straight. London: Centre for Management Buyout Research, Nottingham University Business School. Available at: http://www.nottingham.ac.uk/business/cmbor/ impact.pdf.
85. Wruck, Karen Hopper. 1998. Financial Policy, Internal Control, and Performance: Sealed Air Corporation's Leveraged Special Dividend. Columbus: Fisher College of Business, Department of Finance, Ohio State University, May 7. Available at: http://papers.ssrn.com/sol3/ papers.cfm?abstract_id=5352.