The new demography of private equity

This paper analyzes global leveraged buyout (LBO) activity, exit behaviour, and holding periods using a data set of more than 21,000 LBO transactions 1970-2007. We estimate the total value of the firms acquired in these transactions to $3.6 trillion, out of which $2.7 trillion represents LBOs undertaken after 2000. We document a large increase in the geographical and industry scope of LBO transactions over time. Most LBO activity consists of acquisitions of private rather than public firms and LBOs provide a net positive flow of firms to public markets over the long-run. LBO holding periods are longer than what has been documented in previous research. Only 8 % of firms stay in LBO ownership for less than two years and the median firm stays in LBO ownership for about 9 years. LBO transactions sponsored by more experienced private equity partnerships tend to stay in LBO ownership for a shorter period of time, are more likely to go public, and are less likely to end in bankruptcy or financial restructuring