RT Journal Article
SR Electronic
T1 Debt Investments in Private Firms:
Legal Institutions and Investment
Performance in 25 Countries
JF The Journal of Fixed Income
FD Institutional Investor Journals
SP 102
OP 123
DO 10.3905/jfi.2013.23.1.102
VO 23
IS 1
A1 Douglas Cumming
A1 Grant Fleming
YR 2013
UL https://pm-research.com/content/23/1/102.abstract
AB The authors document the types of private debt investments made by fund managers into private firms across 25 countries from 2001–2010. Returns to private debt investments depend on lender (fund manager) characteristics, particularly portfolio size per manager, thus highlighting the role of time allocation for due diligence and monitoring. Also, investment returns are significantly related to borrower (firm-specific) risk. By contrast, market conditions, such as TED spreads, and country-level legal factors, such as creditor rights, are insignificantly or, at most, weakly related to returns. Market and legal conditions are nevertheless significantly related to private debt investment volumes and location.TOPICS: Real assets/alternative investments/private equity, fixed income and structured finance, fixed-income portfolio management