Copyright (c) 2009 All rights reserved. http://works.bepress.com/william_birdthistle Recent documents in William Birdthistle en-us Thu, 19 Nov 2009 13:52:13 PST 3600 http://works.bepress.com/william_birdthistle/21 http://works.bepress.com/william_birdthistle/21 Fri, 25 Sep 2009 12:52:20 PDT William Birdthistle Securities Law http://works.bepress.com/william_birdthistle/20 http://works.bepress.com/william_birdthistle/20 Fri, 27 Feb 2009 10:55:57 PST William Birdthistle Securities Law http://works.bepress.com/william_birdthistle/19 http://works.bepress.com/william_birdthistle/19 Tue, 17 Feb 2009 12:40:36 PST William Birdthistle http://works.bepress.com/william_birdthistle/18 http://works.bepress.com/william_birdthistle/18 Tue, 09 Sep 2008 12:08:44 PDT The nature of private equity investing has changed significantly as two dynamics have evolved in recent years: portfolio companies have begun to experience serious financial distress, and general partners have started to diversify and desegregate their investment strategies. Both developments have led private equity shops - once exclusively interested in acquiring equity positions through leveraged buyouts - to invest in other tranches of the investment spectrum, most particularly public debt. By investing now in both private equity and public debt of the same issuer, general partners are generating a host of new conflicts of interest between themselves and their limited partners, between multiple general partners in the same consortia, and between private investors and public shareholders. In this essay, we identify and explore these various new tensions that have begun to arise in the private equity industry. We then propose and examine an array of possible ways to eliminate or alleviate those conflicts, exploring the regulatory, fiduciary, and pragmatic strengths and weaknesses of each approach. General partners can seek investor unanimity or consent for follow-on investments, but certain tax and practical barriers complicate that approach. Alternatively, they can opt for a range of architectural prophylaxes to protect against conflicts. These add costs on everyone, however, and, experience in related fields shows, they do not work. Investors, for their part, can attempt to diversify their own investment holdings to counterbalance risk, but this still leaves some vulnerable to opportunistic fund managers, and may increase costs for all investors as well. We propose a less costly and more efficient solution: advisers and investors should work together to create a vibrant secondary market for private equity interests to create a salutary exit option, which would in turn discipline the investment behavior of fund managers in this turbulent new investing environment. William Birdthistle Securities Law http://works.bepress.com/william_birdthistle/17 http://works.bepress.com/william_birdthistle/17 Tue, 15 Jul 2008 12:17:26 PDT William Birdthistle http://works.bepress.com/william_birdthistle/16 http://works.bepress.com/william_birdthistle/16 Mon, 25 Feb 2008 08:08:50 PST William Birdthistle http://works.bepress.com/william_birdthistle/15 http://works.bepress.com/william_birdthistle/15 Tue, 23 Oct 2007 08:12:37 PDT One of the most dynamic and complex new investment vehicles on the market today is the exchange-traded fund (ETF), a security that provides the diversification of a mutual fund but trades on a securities exchange like a stock. In just fifteen years, the number of ETFs has proliferated to well over 600, attracting more than half a trillion dollars in investment. The majority of that expansion has occurred in just the past two years, largely as a consequence of recent difficulties in the mutual fund industry. With ETF sponsors aggressively seeking to create novel kinds of ETFs and to add ETFs to retirement account menus, these funds are projected to continue growing at a pace far faster than hedge funds and mutual funds in the coming years. Yet, for all this extraordinary growth, legal scholars have virtually ignored ETFs. This article seeks to establish a descriptive and conceptual framework for the scholarly discussion of these funds as they gain ever-greater prominence, for good or for ill, in the coming years. In exploring the structure, advantages, and shortcomings of ETFs, this article argues that ETFs are a positive market response to the shortcomings of mutual funds. ETFs use a novel pricing mechanism that harnesses the utility of arbitrage to provide investors with accuracy, efficiency, tax advantages, and a range of investment choices, while insulating investors from many of the structural problems associated with mutual funds. Despite these advan-tages, critics decry their brokerage fees and vulnerability to harmful short-term trading. This article argues that the mutual fund industry and its recent spate of dramatic scandals contributed to the emergence of ETFs and concludes that mutual funds offer vivid warnings of the conflicts of interest that may come to afflict the ETF industry as it continues to grow. William Birdthistle Securities Law http://works.bepress.com/william_birdthistle/13 http://works.bepress.com/william_birdthistle/13 Tue, 27 Mar 2007 10:21:16 PDT William Birdthistle Book Review http://works.bepress.com/william_birdthistle/12 http://works.bepress.com/william_birdthistle/12 Tue, 27 Mar 2007 10:19:09 PDT William Birdthistle General Interest http://works.bepress.com/william_birdthistle/11 http://works.bepress.com/william_birdthistle/11 Fri, 23 Feb 2007 11:38:06 PST William Birdthistle General Interest