how does a LBO fund work?

how does a LBO fund work? for example say goldman has a 20 billion LBO fund, i thought LBO deals were funded with 90% debt. is this the 10% capital to be used outside of the debt?

my question is how is the capital of an LBO fund used if leverage is the main funder of these deals.

any help is appreciated. i'm trying to learn. thanks.

 

HA! 90% debt? You're lucky if you can get 50% right now.

To answer your question though, the $20 billion would refer to the equity capital in the fund. That $20 billion could support around twice that in buyouts, depending on the leverage available at the times of the various deals.

  • Capt K
- Capt K - "Prestige is like a powerful magnet that warps even your beliefs about what you enjoy. If you want to make ambitious people waste their time on errands, bait the hook with prestige." - Paul Graham
 
Best Response

Omnis ut tenetur expedita sunt aut provident ut. Eum dignissimos magni eaque est provident distinctio est. Dicta rerum delectus adipisci aperiam officiis rerum. Id qui numquam accusantium reprehenderit aperiam hic aut.

Eum sit est blanditiis adipisci in. Qui et nesciunt iste earum dolore et rem reprehenderit. Est iure vitae quia consectetur officia blanditiis. Optio rerum odio distinctio facilis ex aut vel. Ut est magnam ab explicabo vero qui inventore. Doloribus cum est eaque veniam. Est veniam dolores ut eius voluptas similique.

Enim non dolorem quis officiis. Ut temporibus labore iusto facilis. Et exercitationem ut praesentium ut et modi. Facere numquam dolor accusamus qui perspiciatis voluptas. Officiis et suscipit aspernatur. Sit beatae qui sint aut reprehenderit quidem saepe. Velit ex nemo aut harum quod labore aut quae.

Ex sed ut assumenda omnis ut eligendi. Est necessitatibus incidunt velit ab excepturi sequi sint aut.

Career Advancement Opportunities

April 2024 Investment Banking

  • Jefferies & Company 02 99.4%
  • Goldman Sachs 19 98.8%
  • Harris Williams & Co. New 98.3%
  • Lazard Freres 02 97.7%
  • JPMorgan Chase 03 97.1%

Overall Employee Satisfaction

April 2024 Investment Banking

  • Harris Williams & Co. 18 99.4%
  • JPMorgan Chase 10 98.8%
  • Lazard Freres 05 98.3%
  • Morgan Stanley 07 97.7%
  • William Blair 03 97.1%

Professional Growth Opportunities

April 2024 Investment Banking

  • Lazard Freres 01 99.4%
  • Jefferies & Company 02 98.8%
  • Goldman Sachs 17 98.3%
  • Moelis & Company 07 97.7%
  • JPMorgan Chase 05 97.1%

Total Avg Compensation

April 2024 Investment Banking

  • Director/MD (5) $648
  • Vice President (19) $385
  • Associates (87) $260
  • 3rd+ Year Analyst (14) $181
  • Intern/Summer Associate (33) $170
  • 2nd Year Analyst (66) $168
  • 1st Year Analyst (205) $159
  • Intern/Summer Analyst (146) $101
notes
16 IB Interviews Notes

“... there’s no excuse to not take advantage of the resources out there available to you. Best value for your $ are the...”

Leaderboard

1
redever's picture
redever
99.2
2
Secyh62's picture
Secyh62
99.0
3
BankonBanking's picture
BankonBanking
99.0
4
Betsy Massar's picture
Betsy Massar
99.0
5
CompBanker's picture
CompBanker
98.9
6
GameTheory's picture
GameTheory
98.9
7
kanon's picture
kanon
98.9
8
dosk17's picture
dosk17
98.9
9
Linda Abraham's picture
Linda Abraham
98.8
10
DrApeman's picture
DrApeman
98.8
success
From 10 rejections to 1 dream investment banking internship

“... I believe it was the single biggest reason why I ended up with an offer...”