Leveraged Buyouts in the Era of Quantitative Easing : An Empirical Analysis of European Private Equity Buyouts B Unconventional Monetary Policies

Abstract

Using proprietary European data on private equity (PE) buyouts, this thesis contributes to the growing research on the relationship between financial markets, investment decisions and quantitative easing. Detailed country data with yearly observations from 2007 to 2021 allow for a dynamic panel data approach when examining the impact of quantitative easing on various variables related to LBOs. The estimations find no evidence of the expected relationship between quantitative easing and private equity buyouts, the fundraising efforts of PE funds or the issuance of leveraged loans conducted to finance buyouts. Instead, there is evidence that lower long-term yields drive the expansion of the leveraged loan market. The results of this thesis suggest that buyout funds may have exploited a relative discount in the leveraged loans market. However, there is nothing to suggest that this discount was driven by quantitative easing.