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What Private Equity Investors Think They Do for the Companies They Buy

Harvard Business Review

In particular, we are interested in how many of their responses correlate with what academic finance knows and what it teaches. In financial engineering, PE investors provide strong equity incentives to the management teams of their portfolio companies. Rather, they rely on internal rates of return and multiples of invested capital.

CAPM 8
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The Case for Stock Buybacks

Harvard Business Review

They particularly overpay when the interest rate – the rate of return required by the bank – is high, just as firms particularly repurchase when the stock price is low and thus the rate of return required by shareholders is high. Higher CEO ownership stakes typically improve long-term stock returns.

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Venture Capitalists Get Paid Well to Lose Money

Harvard Business Review

There are, of course, individual firms that succeed in generating venture rates of return. But they are too small in size and too few in number to make up for the vast majority of funds that fail to generate attractive returns (or any returns) for investors. Finance Venture capital'

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Don’t Take Money from VCs Until You’ve Asked 4 Questions

Harvard Business Review

They can also run into trouble syndicating later rounds of financing if other VC firms see that they are losing partners, or suspect that they are a “zombie” firm, unable to raise a subsequent fund. VCs understand these dynamics, and work hard to keep their performance numbers confidential. Insight Center.