January 15, 2010

Weisbach receives best paper award at 2010 AFA conference

Michael Weisbach, professor and Ralph W. Kurtz Chair in Finance, received the first-place Brattle Group Prize for outstanding paper on corporate finance at the American Finance Association’s  2010 annual conference last week in Atlanta.

Weisbach co-authored, “Why are Buyouts Levered? The Financial Structure of Private Equity Funds,” with Ulf Axelson and Per Stromberg, both of the Stockholm School of Economics. It was published in August 2009 in The Journal of Finance.

According to the abstract, “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.”

The Brattle Group Prizes are awarded annually for outstanding papers on corporate finance. The winning papers are chosen by the associate editors of The Journal of Finance.