Why are Buyouts Levered: The Financial Structure of Private Equity Funds

This paper presents a model of the financial structure of private equity firms. In the model, the general partner of the firm encounters a sequence of deals over time where the exact quality of each deal cannot be credibly communicated to investors. We show that the optimal financing arrangement is consistent with a number of characteristics of the private equity industry. First, the firm should be financed by a combination of fund capital raised before deals are encountered, and capital that is raised to finance a specific deal. Second, the fund investors' claim on fund cash flow is a combination of debt and levered equity, while the general partner receives a claim similar to the carry contracts received by real-world practitioners. Third, the fund will be set up in a manner similar to that observed in practice, with investments pooled within a fund, decision rights over investments held by the general partner, and limits set in partnership agreements on the size of particular investments. Fourth, the model suggests that incentives will lead to overinvestment in good states of the world and underinvestment in bad states, so that the natural industry cycles will be multiplied. Fifth, investments made in recessions will on average outperform investments made in booms.

Borrow Cheap, Buy High? The Determinants of Leverage and Pricing in Buyouts

This paper provides an empirical analysis of the financial structure of large buyouts. We collect detailed information on the financing of 1157 worldwide private equity deals from 1980 to 2008. Buyout leverage is cross-sectionally unrelated to the leverage of matched public firms, and is largely driven by factors other than what explains leverage in public firms. In particular, the economy-wide cost of borrowing is the main driver of both the quantity and the composition of debt in these buyouts. Credit conditions also have a strong effect on prices paid in buyouts, even after controlling for prices of equivalent public market companies. Finally, the use of high leverage in transactions negatively affects fund performance, controlling for fund vintage and other relevant characteristics. The results are consistent with the view that the availability of financing impacts booms and busts in the private equity market, and that agency problems between private equity funds and their investors can affect buyout capital structures.

A PC parallel port button box provides millisecond response time accuracy under Linux

For psychologists, it is sometimes necessary to measure people's reaction times to the nearest millisecond. This article describes how to use the PC parallel port to receive signals from a button box to achieve millisecond response time accuracy. The workings of the parallel port, the corresponding port addresses, and a simple Linux program for controlling the port are described. A test of the speed and reliability of button box signal detection is reported. If the reader is moderately familiar with Linux, this article should provide sufficient instruction for him or her to build and test his or her own parallel port button box. This article also describes how the parallel port could be used to control an external apparatus

A flexible approach to introductory programming : engaging and motivating students

© 2019 Copyright is held by the owner/author(s). In this paper, we consider an approach to supporting students of Computer Science as they embark upon their university studies. The transition to Computer Science can be challenging for students, and equally challenging for those teaching them. Issues that are unusual – if not unique – to teaching computing at this level include • the wide variety in students background, varying from no prior experience to extensive development practice; • the positives and negatives of dealing with self-taught hobbyists who may developed buggy mental models of the task in hand and are not aware of the problem; • the challenge of getting students to engage with material that includes extensive practical element; • the atypical profile of a computing cohort, with typically 80%+ male students. The variation in background includes the style of prior academic experience, with some students coming from traditional level 3 (i.e. A-levels), some through more vocational routes (e.g. B-Tech, though these have changed in recent years), through to those from experiential (work based) learning. Technical background varies from science, mathematical and computing experience, to no direct advanced technical or scientific experience. A further issue is students’ attainment and progression within higher education, where the success and outcomes in computer science has been identified as particularly problematic. Computer Science has one the worst records for retention (i.e. students leaving with no award, or a lower award than that originally applied for), and the second worst for attainment (i.e. achieving a good degree, that being defined as a first or a 2:1). One way to attempt to improve these outcomes is by identifying effective ways to improve student engagement. This can be through appropriate motivators – though then the balance of extrinsic versus intrinsic motivation becomes critical. In this paper, we consider how to utilize assessment – combining the formative and summative aspects - as a substitute for coarser approaches based on attendance monitoring

A flexible approach to introductory programming : engaging and motivating students

© 2019 Copyright is held by the owner/author(s). In this paper, we consider an approach to supporting students of Computer Science as they embark upon their university studies. The transition to Computer Science can be challenging for students, and equally challenging for those teaching them. Issues that are unusual – if not unique – to teaching computing at this level include • the wide variety in students background, varying from no prior experience to extensive development practice; • the positives and negatives of dealing with self-taught hobbyists who may developed buggy mental models of the task in hand and are not aware of the problem; • the challenge of getting students to engage with material that includes extensive practical element; • the atypical profile of a computing cohort, with typically 80%+ male students. The variation in background includes the style of prior academic experience, with some students coming from traditional level 3 (i.e. A-levels), some through more vocational routes (e.g. B-Tech, though these have changed in recent years), through to those from experiential (work based) learning. Technical background varies from science, mathematical and computing experience, to no direct advanced technical or scientific experience. A further issue is students’ attainment and progression within higher education, where the success and outcomes in computer science has been identified as particularly problematic. Computer Science has one the worst records for retention (i.e. students leaving with no award, or a lower award than that originally applied for), and the second worst for attainment (i.e. achieving a good degree, that being defined as a first or a 2:1). One way to attempt to improve these outcomes is by identifying effective ways to improve student engagement. This can be through appropriate motivators – though then the balance of extrinsic versus intrinsic motivation becomes critical. In this paper, we consider how to utilize assessment – combining the formative and summative aspects - as a substitute for coarser approaches based on attendance monitoring

Measures and models for causal inference in cross-sectional studies: arguments for the appropriateness of the prevalence odds ratio and related logistic regression

<p>Abstract</p> <p>Background</p> <p>Several papers have discussed which effect measures are appropriate to capture the contrast between exposure groups in cross-sectional studies, and which related multivariate models are suitable. Although some have favored the Prevalence Ratio over the Prevalence Odds Ratio -- thus suggesting the use of log-binomial or robust Poisson instead of the logistic regression models -- this debate is still far from settled and requires close scrutiny.</p> <p>Discussion</p> <p>In order to evaluate how accurately true causal parameters such as Incidence Density Ratio (IDR) or the Cumulative Incidence Ratio (CIR) are effectively estimated, this paper presents a series of scenarios in which a researcher happens to find a preset ratio of prevalences in a given cross-sectional study. Results show that, provided essential and non-waivable conditions for causal inference are met, the CIR is most often inestimable whether through the Prevalence Ratio or the Prevalence Odds Ratio, and that the latter is the measure that consistently yields an appropriate measure of the Incidence Density Ratio.</p> <p>Summary</p> <p>Multivariate regression models should be avoided when assumptions for causal inference from cross-sectional data do not hold. Nevertheless, if these assumptions are met, it is the logistic regression model that is best suited for this task as it provides a suitable estimate of the Incidence Density Ratio.</p

Effect of dietary intervention on serum lignan levels in pregnant women - a controlled trial

<p>Abstract</p> <p>Background</p> <p>Mother's diet during pregnancy is important, since plant lignans and their metabolites, converted by the intestinal microflora to enterolignans, are proposed to possess multiple health benefits. Aim of our study was to investigate whether a dietary intervention affects lignan concentrations in the serum of pregnant women.</p> <p>Methods</p> <p>A controlled dietary intervention trial including 105 first-time pregnant women was conducted in three intervention and three control maternity health clinics. The intervention included individual counseling on diet and on physical activity, while the controls received conventional care. Blood samples were collected on gestation weeks 8-9 (baseline) and 36-37 (end of intervention). The serum levels of the plant lignans 7-hydroxymatairesinol, secoisolariciresinol, matairesinol, lariciresinol, cyclolariciresinol, and pinoresinol, and of the enterolignans 7-hydroxyenterolactone, enterodiol, and enterolactone, were measured using a validated method.</p> <p>Results</p> <p>The baseline levels of enterolactone, enterodiol and the sum of lignans were higher in the control group, whereas at the end of the trial their levels were higher in the intervention group. The adjusted mean differences between the baseline and end of the intervention for enterolactone and the total lignan intake were 1.6 ng/ml (p = 0.018, 95% CI 1.1-2.3) and 1.4 ng/mg (p = 0.08, 95% CI 1.0-1.9) higher in the intervention group than in the controls. Further adjustment for dietary components did not change these associations.</p> <p>Conclusion</p> <p>The dietary intervention was successful in increasing the intake of lignan-rich food products, the fiber consumption and consequently the plasma levels of lignans in pregnant women.</p> <p>Trial registration</p> <p><b>ISRCTN21512277, <url>http://www.isrctn.org</url></b></p

Parsing cyclothymic disorder and other specified bipolar spectrum disorders in youth

© 2018 Elsevier B.V. Objective: Most studies of pediatric bipolar disorder (BP) combine youth who have manic symptoms, but do not meet criteria for BP I/II, into one “not otherwise specified” (NOS) group. Consequently, little is known about how youth with cyclothymic disorder (CycD) differ from youth with BP NOS. The objective of this study was to determine whether youth with a research diagnosis of CycD (RDCyc) differ from youth with operationalized BP NOS. Method: Participants from the Course and Outcome of Bipolar Youth study were evaluated to determine whether they met RDCyc criteria. Characteristics of RDCyc youth and BP NOS youth were compared at baseline, and over eight-years follow-up. Results: Of 154 youth (average age 11.96 (3.3), 42% female), 29 met RDCyc criteria. RDCyc youth were younger (p =.04) at baseline. Over follow-up, RDCyc youth were more likely to have a disruptive behavior disorder (p =.01), and were more likely to experience irritability (p =.03), mood reactivity (p =.02), and rejection sensitivity (p =.03). BP NOS youth were more likely to develop hypomania (p =.02), or depression (p =.02), and tended to have mood episodes earlier in the eight-year follow-up period. Limitations: RDCyc diagnoses were made retrospectively and followed stringent criteria, which may highlight differences that, under typical clinical conditions and more vague criteria, would not be evident. Conclusion: There were few differences between RDCyc and BP NOS youth. However, the ways in which the groups diverged could have implications; chronic subsyndromal mood symptoms may portend a severe, but ultimately non-bipolar, course. Longer follow-up is necessary to determine the trajectory and outcomes of CycD symptoms