Rentens indflydelse på gearingen af kapitalfonds LBO-transaktioner

Abstract

The recent rate hikes, at a historical pace, by the Federal Reserve, combined with a decade- long growth in the Private Equity industry, have impelled the authors to study how the leverage ratio of leveraged buyouts undertaken by this segment of acquirers has been impacted by the interest rate from a historical perspective. Previous studies concerned with the leverage of private equity companies have either focused on its impact on performance or on general identification of determinants. Therefore, this thesis will provide new insight into an area that has seen limited previous coverage. The study employs a sample comprising N = 125 global acquisitions conducted by American and Canadian acquirers during the period 1995-2022. Additionally, two sub-samples are considered for the periods 1995-2008 and 2009-2022, marked by the global financial crisis. Various parametric and non-parametric statistical tests, along with regression models, are utilized to analyze the data. Furthermore, to gain a comprehensive understanding of the subject matter, interviews with two experienced practitioners involved in debt financing within the private equity industry have been conducted, providing valuable insights to complement the quantitative analysis. The study finds little statistical evidence that the interest rate has a consistent significant impact on the leverage of private equity LBOs when analyzing the entire period. However, some indications exist that a negative relationship between interest rate and leverage does exist, when focusing on the sub-samples independently. Further, the presence of varying structural conditions is hypothesized as a key factor contributing to the inconsistent findings, which also limits the ability to definitively determine the presence or absence of a causal relationship between the interest rate and private equity LBO leverage.