Post by Sapphire Capital on Sept 5, 2008 21:14:57 GMT 4
Does Private Equity Create Wealth?
Ronald W. Masulis
Vanderbilt University - Owen Graduate School of Management
Randall S. Thomas
Vanderbilt University - School of Law; Vanderbilt University - Owen Graduate School of Management
August 6, 2008
Vanderbilt Law and Economics Research Paper No. 08-20
Abstract:
Private equity has reaped large rewards in recent years. We claim that one major reason for this success is due to the corporate governance advantages of private equity over the public corporation. We argue that the development of substantial derivative contracts and trading has significantly weakened the governance of public corporations and has created a need for financially sophisticated directors and much closer supervision of management. The private equity model delivers these benefits and allows corporations to be better governed, creating wealth gains for investors.
papers.ssrn.com/sol3/Delivery.cfm/SSRN_ID1207858_code254274.pdf?abstractid=1207858&mirid=1
Ronald W. Masulis
Vanderbilt University - Owen Graduate School of Management
Randall S. Thomas
Vanderbilt University - School of Law; Vanderbilt University - Owen Graduate School of Management
August 6, 2008
Vanderbilt Law and Economics Research Paper No. 08-20
Abstract:
Private equity has reaped large rewards in recent years. We claim that one major reason for this success is due to the corporate governance advantages of private equity over the public corporation. We argue that the development of substantial derivative contracts and trading has significantly weakened the governance of public corporations and has created a need for financially sophisticated directors and much closer supervision of management. The private equity model delivers these benefits and allows corporations to be better governed, creating wealth gains for investors.
papers.ssrn.com/sol3/Delivery.cfm/SSRN_ID1207858_code254274.pdf?abstractid=1207858&mirid=1