Its an often used term to describe one of the main drivers of PE returns pre-crisis. When people refer to "financial engineering" I assume what they mean is the use of leverage (debt), right? ...that it was high. its a term used a lot by people and just wanna make sure I understand it correctly.
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Yes, as opposed to creating value through operational improvements, acquisitions, etc.
No. Google this. FE is much broader.
Not with respect to pre-crisis PE returns. OP was asking specifically about what it meant when brought up in that contest.
Even in that narrow context there's some subtlety that's worth examining (debt terms/covenants/structure, PIK and mezz and cashflow priority, etc); it's not like FE just means "add as much leverage as possible."
http://lmgtfy.com/?q=financial+engineering
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