Securities Law Prof Blog

Editor: Eric C. Chaffee
Univ. of Toledo College of Law

Friday, April 13, 2007

Pre-IPO Dividends for Private Equity Firms

Pre-IPO dividends from borrowed funds are becoming a standard technique for the principals of private equity firms and hedge funds to profit from their holdings, with the debt being paid off from the IPO proceeds.  Fortress Investment, Apollo Management and the Blackstone Group are among the firms that have used or are considering this strategy.  See WSJ, Executives Hedge Their Own IPOs.

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