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THE EVOLUTION AND STRATEGIC POSITIONING OF PRIVATE EQUITY FIRMS1

Robert E. Hoskisson, Wei Shi, Xiwei Yi, and Jing Jin

Introduction

General partners in private equity (PE) firms manage funds contributed by PE investors (limited partners, usually institutional investors) to acquire portfolio firms, most often using additional debt capital borrowed from banks or debt markets. As such, PE firms’ general partners, limited partner investors, portfolio firms (or acquired firms, often labeled buyout firms), banks, and other debt providers are the main players in PE transactions (Stowell, 2010; Gilligan & Wright, 2014). Among the above five players, PE firms’ general partners play the most important role as they solicit investor funds (limited ...

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