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Dual holdings and shareholder–creditor agency conflicts: Evidence from the syndicated loan market

Author

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  • Ingo Geburtig
  • Thomas Mählmann
  • Roberto Liebscher

Abstract

We examine implications from the expansion of private equity (PE) firms into the collateralized loan obligation (CLO) (i.e., leveraged lending) business. Due to similarities in the investment universes of CLO managers and PE firms, asset managers running both of them frequently hold debt and equity claims of the same company. Our results indicate lower credit costs for these companies through the mitigation of shareholder–creditor agency conflicts. The lower funding costs imply increased equity returns for the sponsoring PE firms. In addition, our findings suggest that PE‐affiliated CLO managers benefit from informed trading in the secondary leveraged loan market.

Suggested Citation

  • Ingo Geburtig & Thomas Mählmann & Roberto Liebscher, 2025. "Dual holdings and shareholder–creditor agency conflicts: Evidence from the syndicated loan market," Journal of Business Finance & Accounting, Wiley Blackwell, vol. 52(1), pages 222-260, February.
    • Handle: RePEc:bla:jbfnac:v:52:y:2025:i:1:p:222-260
    DOI: 10.1111/jbfa.12805
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    References listed on IDEAS

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