Meuleman, Miguel, Wright, Mike, Manigart, Sophie and Lockett, Andy. (2009) Private equity syndication : agency costs, reputation and collaboration. Journal of Business Finance & Accounting, Vol.36 (No.5-6). pp. 616-644. ISSN 0306-686X

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Abstract

Syndicates are a form of inter-firm alliance in which two or more private equity firms invest together in an investee firm and share a joint pay-off, and are an enduring feature of the leveraged buyout (LBO) and private equity industry. This study examines the relationship between syndication and agency costs at the investor-investee level, and the extent to which the reputation and the network position of the lead investor mediate this relationship. We examine this relationship using a sample of 1,122 buyout investments by 80 private equity companies in the UK between 1993 and 2006. Our findings show that where agency costs are highest, and hence ex-post monitoring by the lead investor is more important, syndication is less likely to occur. The negative relationship between agency costs and syndication, however, is alleviated by the reputation and network position of the lead investor firm.

Item Type:	Journal Article
Subjects:	H Social Sciences > HF Commerce
Divisions:	Faculty of Social Sciences > Warwick Business School > Centre for Small & Medium-Sized Enterprises Faculty of Social Sciences > Warwick Business School > Entrepreneurship, Innovation & Management Faculty of Social Sciences > Warwick Business School
Journal or Publication Title:	Journal of Business Finance & Accounting
Publisher:	Wiley-Blackwell Publishing Ltd.
ISSN:	0306-686X
Date:	June 2009
Volume:	Vol.36
Number:	No.5-6
Number of Pages:	39
Page Range:	pp. 616-644
Identification Number:	10.1111/j.1468-5957.2009.02124.x
Status:	Peer Reviewed
Publication Status:	Published
Access rights to Published version:	Restricted or Subscription Access
URI:	http://wrap.warwick.ac.uk/id/eprint/44573

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