Mergers and acquisitions with private equity intermediation
构建了一个由私募股权基金中介的并购搜索模型，发现基金数量增加可通过二级收购市场提升基金价值，但该机制可能在2021年达到顶峰。
We develop a search model of mergers and acquisitions (M&A), intermediated by private equity (PE) funds which may face pressure to sell. The selling pressure leads to the development of a secondary buyout (SBO) market, enabling PE funds to bail each other out. Interestingly, an increase in the number of PE funds can improve each fund’s value, because the enhanced benefits of SBOs can prevail over the reduction in value from narrower buy-sell spreads due to more intense competition. We calibrate the model using data for the US middle market and find that PE funds could lose 64% of their valuation without SBOs. Moreover, the increase in the number of funds from 2000 to 2017 contributes to a 48% increase in fund valuation due to the complementarity among funds. Nevertheless, our model predicts that this mechanism might have peaked in 2021, and more PE funds could decrease their value.