Carsten Bienz

Carsten Bienz

Associate Professor of Finance, NHH

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A list of all the posts and pages found on the site. For you robots out there, there is an XML version available for digesting as well.

Pages

Posts

A new Norwegian Word

less than 1 minute read

Published:

How the Norwegian word for “stablecoins” was born

Norway has a tradition of translating foreign loan words into Norwegian and at NHH’s finance department we are often asked to contribute to come up with terms for new financial terms. In this case my I contributed to this by suggested that stable coins should be called “tilknyttede eiendeler” (a literal translation would be a “linked asset”) in Norwegian to reflect the fact that stable coins aim to peg to another asset but that the peg might not be perfect or always work.

Why your PE investment might not make you rich

less than 1 minute read

Published:

PE investments might not make you rich

Many believe that the benefits of investing should acrue to the investors and not the fund managers. I explain why that believe may be wrong in markets where fund managers have market power.

Formuesskatten og børsnoteringer (Wealth tax and IPOs)

less than 1 minute read

Published:

Wealth Tax and Initial Public Offerings (IPOS)

Aksel Mjøs and I explain how the wealth tax in Norway makes it difficult to list more firms in Norway

We argue that the way the tax works makes it unattractice to list firms and that comes at a cost to society in form of reduced risk sharing for owners and prevents the public from investing and sharing in the success of such firms.

portfolio

publications

Venture Capital Exit Rights

Published in Journal of Economics & Management Strategy, 2010

We investigate when and how venture capital contracts use exit rights such as drag-along and tag-along rights. Utilizing a data set of venture capital contracts from Germany, we find that almost all contracts allocate exit rights to the venture capitalist (VC) rather than to the entrepreneur. In our data set, the vast majority of exit rights deal with the sale of the entire company to a strategic investors rather than with initial public offerings (IPOs). We show that venture capital contracts include exit rights to mitigate potential hold-up problems of the VC in the case of exit.

Recommended citation: Bienz, C., & Walz, U. (2010). "Venture Capital Exit Rights." Journal of Economics & Management Strategy.
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The Dynamics of Venture Capital Contracts

Published in Review of Finance, 2012

Using a detailed German data set on venture capital contracts, the authors document that contracts between venture capitalists (VC) and their portfolio firms specify more complete conditions for future financing for firms that do have no suitable outside financing option and therefore lower ex post bargaining power. The authors’ result is consistent with theories of holdup, where complete contracts protect the entrepreneur from expropriation by the financier. Moreover, there is evidence of learning by VCs. Other possible explanations for observed contracts, such as multitasking or coordination costs, instead have little explanation power.

Recommended citation: Bienz, C., & Hirsch, J. (2012). "The Dynamics of Venture Capital Contracts." Review of Finance.
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Fund Ownership, Wealth, and Risk-Taking: Evidence on Private Equity Managers

Published in Journal of Financial Intermediation, 2023

Private equity (PE) managers are required to invest their own money in the funds they manage. We examine the incentive effects of this ownership on the delegated acquisition decision. A simple model shows that PE managers select less risky firms and use more debt, the higher their ownership. We test these predictions for a sample of Norwegian PE funds, using managers’ wealth to capture their relative risk aversion. As predicted, the target company’s cash-flow risk decreases and leverage increases with the manager’s ownership scaled by wealth. Moreover, the overall portfolio risk decreases with ownership, mitigating widespread concerns about excessive risk-taking.

Recommended citation: Bienz, C., Thorburn, K. S., & Walz, U. (2023). "Fund ownership, wealth, and risk-taking: Evidence on private equity managers." Journal of Financial Intermediation.
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Outcomes, Risk-Taking and Incentives: Evidence from Asset Managers

Published in Journal of Corporate Finance, 2026

We study incentive contracts used by asset management firms in Norway, focusing on how bonus structures impact performance. The incentive contracts in our sample are heterogeneous, with firms rewarding fund managers based on both quantitative and qualitative targets. We find that higher potential bonuses tied to quantitative metrics, such as the information ratio, lead to better risk-adjusted performance at year-end. Managers at risk of missing bonus thresholds attempt to boost performance through portfolio adjustments, but these efforts backfire, resulting in worse outcomes in the latter part of the year.

Recommended citation: Bienz, C., Bonelli, D., Mjøs, A., & Santos, F. (2026). "Outcomes, risk-taking and incentives: Evidence from asset managers." Journal of Corporate Finance.
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The Covenant Defeasance Option in Corporate Bonds

Published in Review of Financial Studies, forthcoming, 2026

Corporate bonds include restrictive covenants that may prevent firms from pursuing valuable growth opportunities ex post and are virtually impossible to renegotiate. We study a common but little-known contractual provision—the defeasance option—which allows issuers to immediately remove all covenants without retiring the bond. Our theoretical model predicts, and our empirical analysis confirms, that defeasance inclusion is more likely when covenants are numerous and issuers face financial constraints, uncertainty, and growth opportunities. We also show that investors require lower yields when defeasance is included in non-callable bonds, and higher yields in fixed-price callable bonds, where it raises call risk.

Recommended citation: Bienz, C., Fluck, Z, & Thorburn, K (2026). "The Covenant Defeasance Option in Corporate Bonds" Review of Financial Studies.
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talks

teaching

Teaching experience 1

Undergraduate course, University 1, Department, 2014

This is a description of a teaching experience. You can use markdown like any other post.

Teaching experience 2

Workshop, University 1, Department, 2015

This is a description of a teaching experience. You can use markdown like any other post.