Quirin Fleckenstein
I am an assistant professor in finance at HEC Paris. My research areas are Macro-Finance, Financial Intermediation, and Corporate Finance.
Contact: fleckenstein@hec.fr
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Research
Working Papers
Intermediary Frictions and the Corporate Credit Cycle: Evidence From CLOs
Abstract:
I study financing frictions in collateralized loan obligations (CLOs), highly leveraged, actively managed credit funds. I provide evidence that debt-equity conflicts distort CLOs’ trading decisions, which increases their cost of debt, particularly when equity is low. This financing friction intensifies in volatile periods, raising debt costs and reducing new issuance. While CLO contracts adjust by limiting managerial discretion and increasing equity funding, these responses are costly and only partially offset the effect. Back-of-the-envelope estimates suggest a substantial impact on issuance. The results show that debt-equity conflicts can meaningfully influence investment decisions, financing costs, and credit supply dynamics in leveraged intermediaries.
Nonbank Lending and Credit Cyclicality with Manasa Gopal, German Gutierrez, and Sebastian Hillenbrand
Forthcoming, Review of Financial Studies
Abstract:
We study the contribution of banks and nonbanks to cyclical fluctuations in the supply of syndicated loans. We find that a reduction in nonbank lending explains most of the contraction in syndicated credit and the associated employment losses during the Global Financial Crisis, while banks’ contribution is small. Looking over multiple cycles, nonbanks’ credit supply is roughly three times more cyclical than banks’, suggesting that nonbanks are the main drivers of syndicated lending cycles. A model in which government support stabilizes bank funding can explain the higher cyclicality of nonbanks.
The Myth of the Lead Arranger’s Share with Kristian Blickle, Sebastian Hillenbrand, and Anthony Saunders
R&R Journal of Finance
Best Paper Award Muenster Banking Workshop
Abstract:
We challenge theories that lead arrangers retain shares of syndicated loans to overcome information asymmetries. Lead arrangers frequently sell their entire loan stake – in over 50% of term and 70% of institutional loans. These sell-offs usually occur days after origination, with lead arrangers retaining no other borrower exposure in 37% of sell-off cases. Counter to theories, sold loans perform better than retained loans. Our results imply that information asymmetries could be lower than commonly assumed or mitigated by alternative mechanisms such as underwriting risk. We also provide guidance for Dealscan users on how to approximate loan ownership after origination.
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