• debt
• financial structure
• LBO
• leveraged buyouts
• private equity
• private equity funds
• value creation

When talking about Leveraged Buyouts (LBOs) in the private equity industry, very few findings have been performed so far on the prominent role of the financing package and the overall capital structure as drivers for creating value for the investors of the fund. Unlike most of the existent research, we investigate value creation under the private equity fund perspective, analyzing the debt financing package used to fund the LBO operation as a lever to deliver value to the specific investors of the fund.

More specifically, in the first part of this research project we analyzed how debt evolved, in terms of composition and tools used, starting from the very outset of this phenomenon in the 1980s up to the financial crisis of 2007. For this section, our observations and results stemmed from a literature review process on the matter.

We then proceeded with an empirical part that had the aim of shedding light on how debt evolved after 2007, by means of a survey sent to a sample of private equity firms. In particular, we attempted to detect possible patterns that might have emerged, in terms of changes of instruments utilized and the overall composition. Hence, we linked those patterns to possible aspects of value creation for the investors of the fund, besides approaching such results to some other relevant aspects of the LBO value creation process, to make our analysis more effective.