Ayako Yasuda
Associate Professor of Management
Research Expertise: Economics of financial intermediation, particularly investment banking, commercial banking, and venture capital/private equity; corporate finance
Associate Professor Ayako Yasuda wants to shed light on the economic roles played by financial intermediaries such as banks, venture capital/private equity funds, and institutional investors that influence a firm’s access to capital. She also wants to examine how incentives (given through compensation contracts, reputation, etc.) impact the actions of specific agents within these institutions.
Her investigations focus on three related areas. The first explores the interplay of firms, investors and other players in the $10 trillion-plus corporate credit market. Yasuda’s recent research found that U.S. firms whose bonds are held primarily by less stable, short-term-oriented investors, such as mutual funds, rely less on bond financing and have less leverage than those whose bonds are bought by more stable investors, such as insurance companies. Her earlier research has also shown that past lending relationships have significant positive effects on the firm’s likelihood of choosing lending banks as underwriters of its new corporate bond issues.
Yasuda’s second research area examines the organizational economics of private equity and venture capital industry using a proprietary dataset of fund-level contracts. Yasuda has found that about two-thirds of expected revenue of private equity funds comes from fixed-revenue components that are not sensitive to performance. The buyout business is more scalable than the venture capital business model, and past success has a differential impact on the terms of their future funds.
Yasuda’s third research area shows that a sell-side analyst’s personal reputation (as measured by Institutional Investor’s All-America awards) is an effective disciplinary device against conflicts of interest, while the reputation of the employer bank alone is not.
Yasuda is co-author (with Andrew Metrick) of Capital and the Finance of Innovation (Wiley, 2010). She earned her Ph.D. in economics at Stanford University, from which she also graduated Phi Beta Kappa with a B.A. in quantitative economics. Before returning to Stanford to earn her Ph.D., she was a financial analyst at Goldman Sachs & Co. from 1993 to 1995.
Her research has been published in the Journal of Finance, the
Journal of Financial
Economics and the Review of Financial
Studies. Yasuda has presented her findings extensively
at academic and professional meetings throughout the U.S. and
internationally. She has received numerous research grants,
including a NYSE Research Fellowship grant for 2008–09 through
the Rodney L. White Center for Financial Research. She comes to
the Graduate School of Management from The Wharton School at the
University of Pennsylvania, where she was an assistant professor
of finance from 2001-09.
Room 3206
Ask the Experts: Should Small Business Owners Seek Venture Capital Financing?
Associate Professor Ayako Yasuda shares the pros and cons of when an entrepreneur should or shouldn’t seek venture capital financing.
Supply Uncertainty of the Bond Investor Base and the Leverage of the Firm
Professor Ayako Yasuda
Co-authors: Massimo Massa at INSEAD and Lei Zhang at Nanyang Technological University
Symposium Shines Spotlight on Private Equity
By Alex Russell
The Graduate School of Management hosted its second annual Symposium on Financial Institutions & Intermediaries in March, bringing together two dozen top scholars and industry practitioners from around the world.
Organized by Associate Professors Ayako Yasuda and Roger Edelen, the symposium focused on private equity, an asset class that typically raises capital from institutional investors to invest in companies that are already private or are public and then taken private.
Symposium Shines Spotlight on Private Equity
By Alex Russell
The Graduate School of Management hosted its second annual Symposium on Financial Institutions & Intermediaries in March, bringing together two dozen top scholars and industry practitioners from around the world.
Organized by Associate Professors Ayako Yasuda and Roger Edelen, the symposium focused on private equity, an asset class that typically raises capital from institutional investors to invest in companies that are already private or are public and then taken private.
Venture Capital and the Finance of Innovation, 2nd Edition
Wiley & Sons, 2010
The Financial Principles Every Venture Capitalist Needs To Master!
UC Davis Symposium on Financial Institutions & Intermediaries 2012
This is the second annual symposium on financial institutions and intermediaries. Co-chaired by Professor Yasuda and Professor Edelen, this year’s symposium features guests from around the world to discuss key topics on private equity.
Another View: Private Equity Creates Value
This recent article cites Professor Ayako Yasuda’s 2010 study “The Economics of Private Equity Funds” in which she and her co-authors found that the buyout business is more scalable than
the venture capital business, and that past success has a differential impact on the
terms of their future funds.
Private Equity Under Scrutiny. Bain or Blessing?
This article about the venture capital industry in the current economic and political climate cites Associate Professor Ayako Yasuda’s 2010 study “The Economics of Private Equity Funds” which found that private-equity firms now get around two-thirds of their revenues from fixed fees, regardless of performance.
Amid Attacks on Private Equity, Efforts to Study Its Value
This article about the value of the private equity industry cites the research of Associate Professor Ayako Yasuda, who found in her study “The Economics of Private Equity Funds” that among their sample funds, about two-thirds of expected revenue comes from fixed-revenue components that are not sensitive to performance.
Venture Capital and Other Private Equity: a Survey
European Financial Management, 2011
In this paper, Associate Professor Ayako Yasuda and co-author Andrew Metrick from the Yale School of Management review the theory and evidence on venture capital (VC) and other private equity: why professional private equity exists, what private equity managers do with their portfolio companies, what returns they earn, who earns more and why, what determines the design of contracts signed between (i) private equity managers and their portfolio companies and (ii) private equity managers and their investors (limited partners), and how/whether these contractual designs affect outcomes.
The Role of Institutional Investors in Propagating the Crisis of 2007-2008
Journal of Financial Economics, 2011
Using a novel data of institutional investors’ bond holdings, Associate Professor Ayako Yasuda and co-authors Alberto Manconi from Tilburg University and Massimo Massa from INSEAD examine a transmission of the crisis of 2007-08 from the securitized bond market to the corporate bond market via joint ownership of these bonds by investors.
The authors posit that, ceteris paribus, corporate bonds held by investors with high exposure to securitized bonds and liquidity needs experience greater selling pressure and price declines (yield increases) at the onset of the crisis.
Ayako Yasuda Awards
New Finance Symposium Focuses on Hedge and Mutual Funds
by Jacqueline Romo
Assistant Professors Ayako Yasuda and Roger Edelen recently teamed up to organize the UC Davis Symposium on Financial Institutions & Intermediaries 2011, a one-day conference that brought more than two dozen leading scholars and practitioners to Gallagher Hall on April 1.
This first annual event focused on the nexus of mutual and hedge funds, drawing on the expertise at the School. “Roger and I picked a topic that not only showcased the GSM finance faculty, but one that would encourage engagement from practitioners and academicians alike,” explained Yasuda. “This invitation-only event brought together people knowledgeable about intermediaries from very different perspectives.”
265 Venture Capital and the Finance of Innovation
This course examines VC finance and the related practice of R&D finance. The goal of the course is to apply finance tools and framework to the world of venture capital and financing of projects in high-growth industries.
The Economics of Private Equity Funds
The Review of Financial Studies, 2010
This article analyzes the economics of the private equity industry using a novel model and dataset. Metrick and Yasuda obtain data from a large investor in private equity funds, with detailed records on 238 funds raised between 1993 and 2006. They build a model to estimate the expected revenue to managers as a function of their investor contracts, and test how this estimated revenue varies across the characteristics of our sample funds.
“Intoxicated Investors” Slammed Corporate Bonds
What caused corporate bond yields to balloon as the financial crisis deepened in 2007 and 2008?
This article cites Associate Professor Ayako Yasuda’s study “The Behavior of Intoxicated Investors: The Role of Institutional Investors in Propagating the Crisis of 2007-2008,” which found that corporate bonds held by investors that had high exposures to securitized bonds experienced greater price declines in late 2007 and 2008.
Raising the Curtain on Private Equity Funds
Having grown steadily over the past three decades, private equity funds worldwide today manage $1 trillion in capital raised from retail, individual and institutional investors. They play an increasingly important role as financial intermediaries in addition to their significant day-to-day involvement as company board members and advisors. Yet relatively little is known about the industrial organization of these various funds.
The Effectiveness of Reputation as a Disciplinary Mechanism in Sell-Side Research
The Review of Financial Studies, 2009
In this study, Associate Professor Ayako Yasuda and co-author Lily Fang from INSEAD examine whether the quality differentials in earnings forecasts between reputable and non-reputable analysts vary with the severity of conflicts of interest.