Please use this identifier to cite or link to this item: https://hdl.handle.net/10419/319315 
Year of Publication: 
2024
Citation: 
[Journal:] Journal of Business Finance & Accounting [ISSN:] 1468-5957 [Volume:] 52 [Issue:] 1 [Publisher:] Wiley [Place:] Hoboken, NJ [Year:] 2024 [Pages:] 222-260
Publisher: 
Wiley, Hoboken, NJ
Abstract: 
We examine implications from the expansion of private equity (PE) firms into the collateralized loan obligation (CLO) (i.e., leveraged lending) business. Due to similarities in the investment universes of CLO managers and PE firms, asset managers running both of them frequently hold debt and equity claims of the same company. Our results indicate lower credit costs for these companies through the mitigation of shareholder–creditor agency conflicts. The lower funding costs imply increased equity returns for the sponsoring PE firms. In addition, our findings suggest that PE‐affiliated CLO managers benefit from informed trading in the secondary leveraged loan market.
Subjects: 
conflicts of interest
credit costs
private equity
private information
syndicated loans
Persistent Identifier of the first edition: 
Creative Commons License: 
cc-by Logo
Document Type: 
Article
Document Version: 
Published Version

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