Are there ever circumstances under which growth or control (excluding buyout) investors will use leverage?
Got to wondering the other day as to whether or not there are ever opportunities where it makes sense to use leverage for a minority/majority (excluding early-stage and buyout) investment in a company. A low effort google search didn't turn up anything so I'm hoping if anyone has seen it they'll share an anecdote or can elaborate on why it wouldn't make sense. Is it purely from a risk perspective that non-buyout investors in the vast majority of cases avoid using leverage?
I think the only way to do this is via fund level debt. Asset level debt (as in LBOs) only works because it's secured by assets of the company, which you now own and control. If it were a minority growth investment, then I don't see how a growth firm could structure asset level debt such that their stake is the same but their IC is lower.
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