Dr Ludovic Phalippou, Saïd Business School, University of Oxford
General Partners (GPs) routinely enter ‘service agreements’ with companies whose board they control. These contracts specify fee payments to be made by the company to the GPs. We describe these contracts, and analyse the drivers of the two main payments: fees for ‘acquiring’ the company and fees for ‘monitoring’. These two fees represent over 6 per cent of equity invested, are larger for underperforming GPs and increased during the recent financial crisis. GPs charging more raise less capital going forward. Our overall body of empirical evidence seems most consistent with hierarchical agency models with sub-optimal supervisor-agent collusion.
Ludovic Phalippou is an Associate Professor of Finance at Saïd Business School, University of Oxford, who specialises in private equity. His research papers have been cited more than 1,000 times according to Google scholar, presented in over 50 university seminars around the world, downloaded over 35,000 times on ssrn.com, and have been published in leading academic journals such as the Journal of Finance, the Review of Financial Studies and the Journal of Economic Perspectives.
Ludovic focuses on the areas of private equity that are of interest to investors and potential investors in that asset class, such as risk management, liquidity and measurement of returns. His deep interest in the concerns facing professionals across the world is reflected in his teaching and research. He has strong links with senior practitioners in the industry, routinely speaks at practitioner conferences, and appears in the media internationally (including The Economist, Financial Times, New York Times). He worked with a number of large institutional investors on their private equity investment decisions and benchmarking systems (e.g. Norway $800 billion sovereign wealth fund, APG $400 billion Dutch pension fund and PGGM $200 billion Dutch pension fund). He recently served as a reviewer for VINNOVA, the Swedish Governmental Agency for Innovation Systems.
Ludovic has received several best-teacher awards and, in 2014, he was named by Poets and Quants as one of the world’s 40 best business school professors under the age of 40. Representative student feedback says that “he has a knack for simplifying complex concepts”, “conveys the material very clearly, and with a lot of fun”, “great energy and ability to captivate class on a difficult topic”, “engaged professor who brings a lot of personality into the classroom”, “constantly pushing us to think critically”. At Oxford, Ludovic teaches two electives courses, Asset Management and Private Equity, for MBA, MFE and EMBA students. Being selected and followed by over 250 students per year, these two elective courses are among the most popular at the school. Ludovic has also taught and developed a variety of executive education courses for major global consulting and asset management companies.
Ludovic achieved a degree in Economics from Toulouse School of Economics; a Master in Economics and a Master in Mathematical Finance both from the University of Southern California; and a PhD in Finance from INSEAD.