short-term bank loans to boost IRR
"...The strategy’s effectiveness is a matter of simple math. Investors in buyout funds typically are required to pony up at the time a deal is struck to buy a company. But now, private equity firms increasingly refrain from calling investors’ money for months at a stretch and instead tap credit lines to complete an acquisition.
Only later does the firm ask for investors’ money. That means the firm uses it for a shorter period -- inflating the fund’s annualized results. A 100 percent return looks better on an annual basis when divided by three years instead of five, for instance."
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