The Economics of the Private Equity Market

The Swedish Institute of Financial Research (SIFR) is pleased to invite interested academics and practitioners to a Conference on “The Economics of the Private Equity Market” on August 30 and 31, 2007, in Stockholm.

This conference is motivated by the unprecedented activity in private equity in the last few years. 2006 has seen records set for the amounts of aggregate fundraising and investment activity, as well as for the size of the individual funds raised and individual buyout transactions undertaken. These investments are having a profound effect in spurring entrepreneurship and restructuring in many industries worldwide. At the same time, the rapid growth and globalization of the industry has worried policy makers and raised demands for increased regulation and disclosure of this sector. Still, public debate has largely ignored the significant amount of academic research evidence that does exist on private equity funds and their impact on the economy. The purpose of this conference is to bring this body of research to the attention of policy makers and practitioners, and to showcase the academic research frontier in private equity.

The first conference day aims to bring together leading academics with financial practitioners and policymakers to discuss recent research on private equity and its broader implications for practice and policy. There will be keynote presentations by leading scholars in the field, which will be followed by a panel discussion where practitioners get to express their views on these issues. The keynote speakers include Tim Jenkinson (Oxford), Michael Jensen (Harvard), Steve Kaplan (Chicago), and Josh Lerner (Harvard). The second conference day has a standard academic format, and aims to provide an academic forum showcasing the frontier in private equity research. Attached are the bios of the keynote speakers as well as a conference program.

Open Conference Program, Thursday, August 30

08:30 Coffee and welcome.

09:00‐12:30 Presentation: Steven Kaplan, University of Chicago: “Private Equity: Fiction, Fact, Future”.

Presentation: Josh Lerner , Harvard University: “The institutionalization of Private Equity: How will the industry evolve going forward?”.

Coffee.

Presentation: Tim Jenkinson, Oxford University: “How is private equity changing public equity markets?”

12:30‐13:30 Lunch

13:30‐17:00 Presentation: Michael Jensen, Harvard University: “The Economic Case for Private Equity (and Some Disturbing Trends)”.

Coffee

Panel Discussion: The future of private equity?
Panelists: Peter Cornelius, Alpinvest
Michael Jensen, Harvard
Casper von Koskull, Goldman Sachs
Björn Savén, Industri Kapital
Gabriel Urwitz, Segulah.

Moderator: Per Strömberg, SIFR.

17:00 Concluding remarks.

Academic Conference Program, Friday, August 31

08:30 Coffee.

09:00‐09:45 Presentation: ”Do Buyouts (Still) Create Value?”
Presenter: Edie Hotchkiss, Weihong Song, University of Cincinnati
Discussant: Francesca Cornelli, London Business School

09:45‐10:30 Presentation: “The financing of large buyouts: Capital structure and deal pricing”
Presenter: Mike Weisbach, University of Illinois
Discussant: Viral Acharya, London Business School

10:30‐11:00 Coffee

11:00‐11:45 Presentation: “Financial leverage and bargaining power with suppliers: Evidence from leveraged buyouts.”
Presenter: Ted Fee, Michigan State
Discussant: Henrik Cronquist, Ohio State University

11:45‐12:30 Presentation: ”The performance of reverse leveraged buyouts.”
Presenter: Josh Lerner, Harvard University
Discussant: Michael Weisbach, University of Illinois

12:30‐13:30 Lunch.

13:30‐14:15 Presentation: “Measuring the risk of private equity funds: A new approach.”
Presenter: Ludovic Phalippou, University of Amsterdam
Discussant: Tarun Ramadorai, Oxford University

14:15‐15:00 Presentation: “Economics of Private equity funds”.
Presenter: Ayako Yasuda, Wharton
Discussant: Chester Spatt, Carnegie Mellon University

15:00‐15:15 Coffee

15:15‐16:00 Presentation: “Which CEO characteristics and abilities matter?”.
Presenter: Morten Sørensen, University of Chicago
Discussant: David Yermack, New York University

16:00 Closing of conference.

Practical information 2007

August 30:

Time: 9:00 - 17:00. Registration starts at 8:30

Location: Berns Conference, Berzelii Park, Stockholm

August 31:

Time: 9:00- 16:00. Registration starts at 8:30

Location: Berns Conference, BerzeliiPark, Stockholm

Keynotes

Tim Jenkinson

Professor of Finance at the Saïd Business School, and is currently also Dean of Degree Programmes. His research is on initial public offerings (in particular the analysis of bookbuilding), securitisation and private equity. He teaches the Private Equity course on the MBA, which has been the most popular elective in recent years. He has written widely on finance and economics and his work has been published in leading journals. He is a Research Fellow of the Centre for Economic Policy Research, a Research Associate of the European Corporate Governance Institute and Managing Editor of the Oxford Review of Economic Policy. He is also a director of Oxford Economic Research Associates (Oxera), is on the advisory board of Verivox GmbH, and has consulted for a large number of companies and regulators. He is a Professorial Fellow of Keble College, Oxford.

Michael C. Jensen

Jesse Isidor Straus Professor of Business Administration, Emeritus, joined the faculty of the Harvard Business School in 1985. He joined the Monitor Company in 2000 as Managing Director of the Organizational Strategy Practice. Professor Jensen earned his Ph.D. in Economics, Finance, and Accounting and his M.B.A. in Finance from the University of Chicago and an A.B. degree from Macalester College. Professor Jensen is the author of more than 90 scientific papers, in addition to numerous articles, comments, and editorials published in the popular media on a wide range of economic, finance and business‐related topics. Dr. Jensen has served as consultant and board member to various corporations, foundations and governmental agencies and has given expert testimony before congressional and state committees and state and federal courts. He has lectured widely at seminars, meetings, conventions and educational institutions. He is Past President of the American Finance Association and the Western Economic Association International.

Steven N. Kaplan

Neubauer Family Professor of Entrepreneurship and Finance, joined the University of Chicago Graduate School of Business (GSB) in 1988. He is the Faculty Director of the GSB’s Polsky Entrepreneurship Center. Professor Kaplan has been a member of the faculty since 1988. Professor Kaplanʹs research, teaching, and consulting focus on issues in corporate governance, private equity and entrepreneurial finance, mergers and acquisitions, and corporate finance. He has published papers in a number of academic and business journals. He has been one of the top‐rated teachers at the GSB in Business Weekʹs biannual surveys since 1992. Business Week named him one of the top twelve business school teachers in the country. Professor Kaplan serves on the board of directors of Accretive Health, Columbia Acorn Funds, and Morningstar (MORN). He also serves as a director of the Illinois Venture Capital Association, the Kauffman Fellows Program, and the University of Chicago Laboratory Schools.

Josh Lerner

is the Jacob H. Schiff Professor of Investment Banking at Harvard Business School, with a joint appointment in the Finance and the Entrepreneurial Management Units. Much of his research focuses on the structure and role of venture capital and private equity organizations. (This research is collected in The Venture Capital Cycle, MIT Press, 1999 and The Money of Invention, Harvard Business School Press, 2001.) He also examines the impact of intellectual property protection, particularly patents, on the competitive strategies of firms in high‐technology industries. (His new book with Princeton University Press, Innovation and Its Discontents, addresses these issues.) In recent years, his course “Venture Capital and Private Equity” has consistently been one of the largest elective courses at Harvard Business School. He also teaches doctoral courses on entrepreneurship and empirical methods in corporate finance, as well as executive education offerings. He serves as the School’s representative on Harvard University Patent, Trademark and Copyright Committee and the Provostʹs Committee on Technology Transfer.