article thumbnail

Private Equity Can Make Firms More Innovative

Harvard Business Review

Amess, Stiebale, and Wright gathered information from three different databases—one on firm characteristics like sales and industry type, one on LBO deals, and one on patent applications and citations. The authors found that three years after an LBO, PE-backed firms had filed 40% more high-quality patent applications than regular firms.

LBO 8
article thumbnail

Private Equity’s New Phase

Harvard Business Review

This phase was loosely called leverage buy out (LBO) from about 1979 to 1990 and included over 2,000 LBOs. The primary focus was on fixing the acquired firm through financial restructuring, dramatic cost cutting, and strategic slashing. This shift means that PE firms’ approaches to talent and leadership must also change.

LBO 8