--- title: Private Equity description: Private equity buys, improves and sells companies using leverage. You will learn the fund model, LBO mechanics, due diligence, value creation, and the history and critiques of the industry. category: finance-economics subcategory: corporate-finance difficulty: beginner, intermediate, advanced url: /subject/private-equity --- # Private Equity Private equity buys, improves and sells companies using leverage. You will learn the fund model, LBO mechanics, due diligence, value creation, and the history and critiques of the industry. ## Available Resources 3 Books • 2 Websites • 4 Papers ## Books ### 1. Private Equity at Work: When Wall Street Manages Main Street **Author:** Eileen Appelbaum, Rosemary Batt Academic study of what happens to companies after they are bought: debt loads, sale-leasebacks, dividend recapitalisations, employment and bankruptcy outcomes, and the limited-liability structures that insulate funds from portfolio company failure. This covers what buyouts do to the operating businesses and their workers. Evidence-based and industry-literate rather than polemical. **Difficulty:** Intermediate | **Language:** English | **Price:** Paid **Link:** https://www.amazon.com/dp/0871540398?tag=edmonddante07-20 **Tags:** private-equity, leveraged-buyouts, corporate-governance, labor-economics, portfolio-companies ### 2. King of Capital: The Remarkable Rise, Fall, and Rise Again of Steve Schwarzman and Blackstone **Author:** David Carey, John E. Morris History of Blackstone from a two-person 1985 startup to a listed asset manager, tracing how buyout shops became permanent institutions: raising first funds, the 2006-07 credit boom, the crash, and the pivot from deals to fee-earning assets. Covers what Barbarians cannot: how the fund model, LP relationships and firm economics evolved from the 1980s to the present. **Difficulty:** Beginner | **Language:** English | **Price:** Paid **Link:** https://www.amazon.com/dp/0307886026?tag=edmonddante07-20 **Tags:** private-equity, blackstone, leveraged-buyouts, asset-management, financial-history ### 3. Barbarians at the Gate: The Fall of RJR Nabisco **Author:** Bryan Burrough, John Helyar Reported account of the 1988 bidding war for RJR Nabisco, the defining leveraged buyout of its era. Shows how LBO financing, management buyouts, junk bonds, bankers and boards actually behave when a deal is live. **Difficulty:** Beginner | **Language:** English | **Price:** Paid **Link:** https://www.amazon.com/dp/0061655554?tag=edmonddante07-20 **Tags:** private-equity, leveraged-buyouts, rjr-nabisco, mergers-and-acquisitions, financial-history ## Websites ### 1. Bain & Company Global Private Equity Report Bain's annual industry review, published free and without registration: deal, exit and fundraising volumes, dry powder, holding periods, fund returns and value-creation chapters. The reference practitioners and journalists cite for current private equity numbers. **Difficulty:** Intermediate | **Language:** English | **Price:** Free **Link:** https://www.bain.com/insights/topics/global-private-equity-report/ **Tags:** private-equity, industry-report, fundraising, deal-activity, fund-returns ### 2. Wall Street Prep – Ultimate Guide to Leveraged Finance **Author:** Wall Street Prep A practitioner-oriented reference on the debt used in leveraged buyouts, comparing first and second lien term loans, revolvers, high yield bonds, mezzanine, and unitranche on pricing, security, and covenant terms, with worked capital structure examples. **Difficulty:** Intermediate | **Language:** English | **Price:** Free **Link:** https://www.wallstreetprep.com/knowledge/ultimate-guide-to-debt-leveraged-finance/ **Tags:** leveraged-finance, high-yield-bonds, term-loan-b, mezzanine-debt, debt-structuring ## Papers ### 1. An Inconvenient Fact: Private Equity Returns & The Billionaire Factory **Author:** Ludovic Phalippou Working paper arguing that private equity funds returned roughly the same as public equity indices from 2006 onward while collecting an estimated $230 billion in carried interest. Explains multiple-of-money and PME benchmarking, and includes rebuttals from major firms. **Difficulty:** Intermediate | **Language:** English | **Price:** Free **Link:** https://papers.ssrn.com/sol3/papers.cfm?abstract_id=3623820 **Tags:** private-equity, fund-performance, carried-interest, public-market-equivalent, fees ### 2. Leveraged Buyouts and Private Equity (Journal of Economic Perspectives) **Author:** Steven N. Kaplan, Per Strömberg Survey of the leveraged buyout industry by two of its leading academic researchers, covering deal structure, fund and fee economics, governance and operating changes at portfolio companies, and the empirical evidence on returns through the 2007 boom. Single best free document explaining what a PE firm actually is: the partnership structure, the 2-and-20 economics, leverage and governance mechanisms, and what the data says about whether any of it creates value. **Difficulty:** Intermediate | **Language:** English | **Price:** Free **Link:** https://www.aeaweb.org/articles?id=10.1257/jep.23.1.121 **Tags:** private-equity, leveraged-buyouts, fund-economics, corporate-governance, empirical-finance ### 3. OCC Comptroller's Handbook – Leveraged Lending **Author:** Office of the Comptroller of the Currency (OCC) The US bank regulator's examination manual for leveraged lending, setting out how supervisors define a leveraged transaction, assess repayment capacity and enterprise valuation, judge covenant quality and underwriting standards, and classify credits that fail those tests. **Difficulty:** Intermediate | **Language:** English | **Price:** Free **Link:** https://www.occ.gov/publications-and-resources/publications/comptrollers-handbook/files/leveraged-lending/pub-ch-leveraged-lending.pdf **Tags:** leveraged-lending, credit-risk, bank-regulation, loan-underwriting, debt-covenants ### 4. Leveraged Finance 101: A Covenant Handbook **Author:** Simpson Thacher & Bartlett LLP Law firm handbook on high-yield bond and leveraged loan covenants, contrasting incurrence with maintenance tests and working through restricted subsidiaries, ratio debt, builder baskets, restricted payments, and liens, the drafting mechanics behind credit agreement flexibility. **Difficulty:** Advanced | **Language:** English | **Price:** Free **Link:** https://www.stblaw.com/docs/default-source/publications/leveraged-finance-101---a-covenant-handbook.pdf **Tags:** leveraged-finance, debt-covenants, credit-agreements, high-yield-bonds, restricted-payments --- *This content is part of Dantes.io - Your Treasure Map to Knowledge* *Curated by humans at Dantes.io. Personal study use welcome; republishing this curation requires permission (team@dantes.io).* View this page online: https://dantes.io/subject/private-equity