EQT: Private Equity with a Purpose The private equity (PE) industry has grown enormously over the past 20 years, from roughly $650 billion in assets under management (AUM) in 2000 to almost $5 trillion in September 2019 (of which some $1.7 trillion is now “dry powder”), an increase of 16% from the prior year and a… Published on: 2020-11-25 Source: The Harvard Law School Forum on Corporate Governance and Financial The Limits of Corwin in the Sale of a Company to a PE Buyer In In re MINDBODY, Inc. Stockholders Litigation, the plaintiffs challenged the merger (the “Merger”) pursuant to which private equity firm Vista Equity Partners acquired MINDBODY, Inc. (the “Company”). The key allegations were that the Company’s CEO-founder-director (“RS”), due to his self-interest in obtaining liquidity and lucrative post-sale employment, “tilted” the… Published on: 2020-11-14 Source: The Harvard Law School Forum on Corporate Governance and Financial Don’t Go Chasing Waterfalls: Fiduciary Obligations in the Shadow of Trados In a newly-released working paper, we tackle a fundamental financial and governance conundrum that nearly every venture capital (VC) backed company faces: when there are multiple classes of stock, how should directors discharge their fiduciary duties? In a typical VC-backed firm, the founders and other early employees hold common stock… Published on: 2020-11-10 Source: The Harvard Law School Forum on Corporate Governance and Financial Private Equity and COVID-19 Private equity (PE) managers have significant incentives to maximize value. As such, their actions during the COVID-19 pandemic should indicate what they perceive as being important for both the preservation and creation of value. In July–August 2020, we surveyed PE managers about their portfolio performance, decision-making, and activities during the… Published on: 2020-10-19 Source: The Harvard Law School Forum on Corporate Governance and Financial Expanding Opportunities for Investors and Retirees: Private Equity In recent years, U.S. companies have raised more equity through private offerings available only to institutional and high-net-worth investors than through initial public offerings available to the general public. In addition, the number of U.S. public companies has been steadily declining, and private start-up companies are frequently reaching billion-dollar valuations… Published on: 2020-09-21 Source: The Harvard Law School Forum on Corporate Governance and Financial PE Seller May Have Liability for Portfolio Company Concealing Steep Earnings Decline Post-Signing Agspring v. NGP (July 30, 2020) involved the sale of a portfolio company, Agspring LLC, by one PE fund (the “Seller”) to another (the “Buyer”). At the pleading stage of litigation, the Delaware Court of Chancery found it reasonably conceivable that: (i) the Agspring officers deliberately concealed from the Buyer… Published on: 2020-09-01 Source: The Harvard Law School Forum on Corporate Governance and Financial Venture Capitalists and COVID-19 In this paper, we survey over 1,000 institutional and corporate venture capitalists (VCs) at over 900 VC firms to learn how their decisions and investments have been affected by the COVID-19 pandemic. Understanding how COVID-19 impacted venture capital is important because many of the most innovative young companies depend on… Published on: 2020-09-01 Source: The Harvard Law School Forum on Corporate Governance and Financial For Whom Corporate Leaders Bargain At the center of a fundamental and heated debate about the purpose that corporations should serve, an increasingly influential “stakeholderism” view advocates giving corporate leaders the discretionary power to serve all stakeholders and not just shareholders. Supporters of stakeholderism argue that its application would address growing concerns about the impact… Published on: 2020-08-25 Source: The Harvard Law School Forum on Corporate Governance and Financial The Resurgence of SPACs: Observations and Considerations The special purpose acquisition company (“SPAC”) is on the rise. A surge of offerings by a series of high-profile SPACs in the last several months has led to record levels of capital being raised by SPACs in 2020. As SPACs become a routine part of M&A processes, private company sellers… Published on: 2020-08-22 Source: The Harvard Law School Forum on Corporate Governance and Financial Comment Letter on Control Shares Statutes and Registered Investment Companies “You’re supposed to stand for somethin’! You’re supposed to protect people!” Once upon a time, investment companies (“funds”) were only subject to the laws of the state in which they were registered. In a report to Congress, the SEC identified a number of abuses and evils, including funds taking advantage… Published on: 2020-08-08 Source: The Harvard Law School Forum on Corporate Governance and Financial Contracts with (Social) Benefits: The Implementation of Impact Investing In our paper, Contracts with (Social) Benefits (forthcoming Journal of Financial Economics), we ask how private market contracts adapt to serve social-benefit goals in addition to financial goals. In particular we consider the potential impact of these additional goals on canonical principal-agent problems: first between investors and the fund, and,… Published on: 2020-08-05 Source: The Harvard Law School Forum on Corporate Governance and Financial SEC Identifies Private Fund Deficiencies On June 23, 2020, the SEC Office of Compliance Inspections and Examinations (“OCIE”) issued a Risk Alert that highlights commonly encountered deficiencies in examinations of hedge fund managers and private equity fund sponsors. At the outset, the Risk Alert connects its observations with respect to private investment funds with the… Published on: 2020-07-27 Source: The Harvard Law School Forum on Corporate Governance and Financial 1 2 3 Next
