How leveraged buyouts produce returns

A Trump executive order is giving retail investors more access to private markets. Is that a golden opportunity — or fool’s gold?

• SOURCES:
  • Elisabeth de Fontenay, professor of law at Duke University.
  • Steven Kaplan, professor of entrepreneurship and finance at the University of Chicago.

• RESOURCES:
  • "Democratizing Access to Alternative Assets for 401(k) Investors," (The White House, 2025).
  • "The (Heterogeneous) Economic Effects of Private Equity Buyouts," by Steven J. Davis, John Haltiwanger, Kyle Handley, Ben Lipsius, Josh Lerner, and Javier Miranda (Management Science, 2025).
  • "Risk-Adjusted Returns of Private Equity Funds: A New Approach," by Arthur G. Korteweg and Stefan Nagel (The Review of Financial Studies, 2025).
  • "The Effects of Management Buyouts on Operating Performance and Value," by Steven Kaplan (Journal of Financial Economics, 1989).

• EXTRAS:
  • "The Biden Policy That Trump Hasn't Touched," by Freakonomics Radio (2025).
  • "Should Companies Be Owned by Their Workers?" by Freakonomics Radio (2024).
  • "Do You Know Who Owns Your Vet?" by Freakonomics Radio (2023).
  • "Are Private Equity Firms Plundering the U.S. Economy?" by Freakonomics Radio (2023).

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