How do Lead Financiers Select Their Partners in Buyout Syndicates? Empirical Results from Buyout Syndicates in Europe

Huyghebaert, N. and R. Priem (2015), “How Do Lead Financiers Select their Partners in Buyout Syndicates? Empirical Results from Buyout Syndicates in Europe”, European Management Review, Forthcoming

Posted: 17 Nov 2015

See all articles by Nancy Huyghebaert

Nancy Huyghebaert

KU Leuven - Department of Accountancy, Finance and Insurance

Randy Priem

Katholieke Universiteit Leuven

Date Written: November 12, 2015

Abstract

Relying on a unique dataset covering 366 buyout syndicates in Europe over the period 1999–2009, we empirically investigate the partnering decisions of lead financiers. We find that lead financiers select investors with whom they developed a prior relationship, either directly or indirectly. Also, lead financiers prefer partners with expertise in the target industry and partners with knowledge about target-country institutions, particularly when their own knowledge in these areas is limited. Finally, they favor investors with a similar level of cognition and status. We further show that these results are mainly driven by the risky buyouts in the sample. Overall, the above partnering choices are found to have genuine economic effects for the post-buyout performance of target firms, with expertise as regards the target industry and target-country institutions having the largest beneficial effect.

Keywords: Buyout, Economic behavior, Partner Selection, Syndication, Target Performance

JEL Classification: A14, D82, D85, G24, G34, Z13

Suggested Citation

Huyghebaert, Nancy and Priem, Randy, How do Lead Financiers Select Their Partners in Buyout Syndicates? Empirical Results from Buyout Syndicates in Europe (November 12, 2015). Huyghebaert, N. and R. Priem (2015), “How Do Lead Financiers Select their Partners in Buyout Syndicates? Empirical Results from Buyout Syndicates in Europe”, European Management Review, Forthcoming, Available at SSRN: https://ssrn.com/abstract=2689531

Nancy Huyghebaert (Contact Author)

KU Leuven - Department of Accountancy, Finance and Insurance ( email )

Naamsestraat 69
B-3000 Leuven, 3000
Belgium
00 32 16326737 (Phone)
00 32 16326683 (Fax)

HOME PAGE: http://www.econ.kuleuven.be/eng/fetew/medewerker/Userpage.aspx?PID=524

Randy Priem

Katholieke Universiteit Leuven ( email )

Oude Markt 13
Leuven, Vlaams-Brabant 3010
Belgium

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