ABSTRACT
This chapter examines test hypotheses relating to the factors that influence the nature and timing of the harvesting of investments in management buy-outs and buy-ins, and the control devices and processes used by institutions in seeking to ensure that harvesting is achieved in a timely fashion. These issues are addressed in a four-country study involving buy-out markets in the UK, France, Holland, and Sweden in order to enable hypotheses concerning the influence of differing environments and states of development of buy-out markets to be examined. As buy-out markets have developed, both in Europe and the US, key attention has focused upon the longevity of such structures and the means and timing of harvesting investments by the parties concerned. One of the most controversial harvest control mechanisms is the equity ratchet, whereby as noted earlier, management’s equity stake can rise if they meet harvest targets within a given period of time.
